Glanbia strike cheesy deal with UK firm
Glanbia plc and the UK's farmer-owned Milk Link have announced the formation of a joint venture company to serve the UK cheese market, Cheese Company Holdings (CCH).
The new company will be 75% owned by Milk Link and 25% by Glanbia.
Glanbia also announced this morning that it will sell 100% of Glanbia Foods to the new venture, CCH, for €140.1m.
Both parties have agreed to provide further financial support for the new venture.
Glanbia will contribute €13.1m in the form of a share premium spread over four years.
Milk Link will contribute an annual amount of £2.5m (€3.7) in connection with the exclusive milk supply contract with Glanbia Foods.
CCH will be the second largest cheese producer in the UK, supplying the retail, food service and ingredient sectors.
It will operate four cheese processing facilities and a consumer packing facility in Britain, and employ approximately 1,000 people.
Glanbia is to use the proceeds of this transaction to invest in growth opportunities in its core markets and said that it expects the sale of Glanbia Foods to result in an exceptional charge of €49.1m for the year ended January 2004.
€8.1m will relate to a write down of assets and €10.5m relates to debt restructuring, a contractual lease and transaction costs.
The deal is conditional on approval by the Irish competition authorities and the Milk Link Member Council with these conditions expected to be fulfilled and the transaction completed by the end of March.
