LacPatrick Dairies and Lakeland Dairies shareholders both voted resoundingly in favour of the merger which would see the two businesses manage 3,200 suppliers, process 1.8 billion litres of milk and have an annual revenue of over €1bn. The merger is subject to regulatory approval however this process is expected to be completed by early 2019, with the combined organisation operating under the Lakeland Dairies name.
Merger talks began in June 2017, with a view to combining the two businesses to form a “strong force in the global dairy industry”. One priority indentified by both businesses was to “work to support dairy farming families on a long term basis into the future by maximising market returns and paying a sustainable and competitive milk price in line with market conditions”.
Alo Duffy, chairman of Lakeland Dairies, said: “The shareholders of both societies have created a great good for co-operative dairy farming. By combining our co-operatives and operations, we will continue our strong progress in a very meaningful way. The new society being formed through this merger will continue to be farmer owned and controlled while paying a sustainable and competitive milk price in line with market conditions into the future.”
Andrew McConkey, chairman of LacPatrick Dairies, said: “By voting in favour of the merger, we are confident that both the LacPatrick and Lakeland shareholders have created a sustainable platform for dairy production in the northern half of the country. This will create stability, scale, efficiency and further added value for our milk producers together with enhanced global market access for our high quality dairy products.”
McConkey said the merger with Lakeland “is the best thing for our milk suppliers, shareholders and customers”. “It gives our farmers the necessary security to make long term business decisions and provides stability for continuing progress in dairy farming for the next generation.”
When the merger terms were agreed upon by the respective company boards earlier this month, Lakeland Dairies CEO Michael Hanley said it would create a more efficient operation. “The economies of scale achievable by combining both societies will create a larger, more efficient, diversified, farmer controlled, global dairy food group with a broad portfolio of value-added products and brands. Both co-operatives have excellent facilities, technologies and resources with strong synergies across our milk processing footprint and in the markets we serve at home and abroad. We will be able to expand the potential of our overall portfolio of products, covering food ingredients, foodservice and consumer foods.”
Hanley added that it would “continue to ensure market access to the United Kingdom, Europe and the world”.