April 30, 2010

ICMSA recommend acceptance of Glanbia deal

The President of ICMSA has issued a 'Yes' recommendation to his members involved in the sale of Glanbia Plc's milk processing and agribusiness operations to Glanbia Co-op on the grounds that on balance the offer is potentially better than the present arrangements within Glanbia.  

Jackie Cahill said that ICMSA had carefully examined the proposal and the association was confident on a number of grounds that the interests of farmers lay with the purchase by the Co-op of the business on the terms outlined. ICMSA had examined the proposal under five headings, which Mr Cahill identified as, firstly, the merits or demerits of the co-op structure versus that of the plc, secondly, the nature of the business to be acquired by the Co-op, thirdly, the price to be paid, fourthly, the prospects of the business under the direction of the Co-op and, fifthly, the impact and implications for farmers – most particularly, dairy farmers.

However, Mr Cahill stressed that farmers would be demanding that the Co-op, if re-established as a trading entity, would have to be more aware of, and sensitive to, farmers needs. "In short, it will have to be a real farmers' Co-op and not pretending to be something else", he warned.

"ICMSA considers the Co-op to be a superior model in terms of delivering to dairy farmers. That's always been our position and that is a decisive factor in recommending to our members that they accept the proposal made by Glanbia Plc. The fact is that there will always be a built-in divergence between the interests of milk suppliers and the interests of the Plc's shareholders. Pretending that there isn't is simply to ignore the realities and the catastrophe that occurred in terms of our milk price over the last 18 months means that we cannot afford to be anything other than hard headed and calculating about the kind of structure that best serves the interest of milk suppliers. The business structure that best serves the interests of milk suppliers is – and in our opinion always has been – that of a commercially focussed and dynamically managed Co-op", he continued.

"The assurance given to ICMSA by Glanbia that the Glanbia shareholding in the IDB, together with the right to a further €10 million loan stock due from IDB, will be transferred to the Co-op and will not be counted as part of the price to be paid by the Co-op to the Plc recognises that this stake-holding was built up by generations of farmers and shows a fairness that ICMSA commends", continued the ICMSA President.

"We think that this is the time to take control again of our own business and our own farming destiny. We can do it and ICMSA thinks that a structure that inherently favours active dairy and other farmers will always be better positioned to respond to their needs that that of a Plc where the fund managers' voices will always drown out every other consideration. ICMSA knows that farmers are entitled to careful weighing-up of their interests and we have done that. In our opinion, the proposal should be accepted."

Ends.      30 April 2010.

Jackie Cahill, 087-2820663

President, ICMSA.

Or

Cathal MacCarthy, 087-6168758 or 061-314677

ICMSA Press Office

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