The much anticipated merger between Lakeland Dairies and LacPatrick Dairies has finally been given the green light.
Competition authorities in both the Republic of Ireland and Northern Ireland - the Competition and Consumer Protection Commission and the UK's Competition and Markets Authority - reached an agreement on the proposal today (Tuesday, March 5).
The CMA cleared the mooted merger in a statement on its website this afternoon.
Both authorities determined and ruled that competition would not be adversely affected as a result of the merger.
The regulatory authorities’ clearance was the last significant hurdle for the merger to go ahead, according to the co-ops.
A number of standard legal and administrative procedures will now be completed to enable the new society to begin trading at the end of March. Until then, the two co-ops will continue to operate independently with each setting its own milk price.
Last November, the CMA placed restrictions on both Lakeland and LacPatrick regarding the integration or transfer of ownership or control of either business.
[also-read url="https://www.agriland.ie/farming-news/uk-competition-watchdog-probes-lakeland-lacpatrick-merger/" title="UK competition watchdog probes Lakeland LacPatrick merger"]
Back in October, Lakeland and LacPatrick announced that both companies had agreed terms to a merger.
Shareholders in both co-ops gave strong backing to the proposed deal, with Lakeland passing the motion with a majority of over 97%, while LacPatrick shareholders backed the merger by 96%.
The registered name of the new co-operative will be Lakeland Dairies Co-Operative Society Limited.
It is understood that the current share value at LacPatrick Dairies will more than treble; while at Lakeland Dairies shareholders are being offered doubled shares.
Michael Hanley is CEO designate of the new Lakeland Dairies and he said:
“We’re very pleased to have reached the conclusion of this process which is now a starting point for future significant progress.
Significant work will have to take place to make the new organisation as efficient as possible and to return the strongest possible milk price back to our farmers.
"The combined businesses have the potential to be one of the powerhouses of the global dairy industry but we must work hard to realise that potential by creating economies of scale and combining our complementary product mix."
Owned and controlled by farmers, the extensive new co-op will consist of over 3,200 milk suppliers and a collective milk pool of some 1.8 billion litres.
This would make it the second largest milk processor on the island of Ireland.