99% for co-op merger
SHAREHOLDERS of co-ops Avonmore and Waterford voted comprehensively in favour of a merger at the second and final confirmation meeting in Ireland last Friday (July 25).
Almost 99% of the 2650 Avonmore members present and 86% of the 3170 Waterford members said "yes" to the deal, which is based on a 29:50 share offer and a hefty milk price bonus.
As farmers voted on the creation of a new Avonmore Waterford Group, Avonmore shares were trading at 307p. This gave an equivalent value of 178p for the Waterford shares – more than double their price before merger plans were revealed in April. At this rate, the overall offer is valued at £409m. The deal still has to be cleared by the competition authorities – the Department of Enterprise and Employment in Dublin and the Office of Fair Trading in London. If successful, it will create the largest single operator in Ireland (with 3.2bn litres) – and possibly in the UK too.
"The scale of the new business will allow it to provide shareholders and suppliers with immediate benefits at a time when farm incomes are under pressure," said Avonmore chairman, John Duggan.
But no decision has yet been taken on whether UK dairy farmers supplying Waterford will have their milk prices increased in line with Avonmores, as will happen in Ireland. *