Nutrition group Glanbia has agreed to sell its 40% stake in Glanbia Ireland to Glanbia Co-op for €307m.
The sale aims to allow the business to focus on its two main growth platforms, Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals (GN), as well as joint ventures.
If the deal is approved, the proceeds from the transaction will be invested in “growth opportunities” with up to 50% returned to shareholders via a share buyback.
Glanbia Ireland is a joint venture owned 60% by Glanbia Co-op and 40% by Glanbia plc. It is the largest milk processor and grain buyer in Ireland, producing a range of dairy ingredients and consumer products as well as selling farm inputs. It operates 11 processing plants, 52 agri retail branches and has over 2,000 employees.
Glanbia’s Group Managing Director Siobhan Talbot stated that the announcement represents the next stage of the company’s transformation. “The proposed transaction will continue the alignment of our portfolio to our strategy, which is focused on driving growth through our market-leading positions as a brand owner and ingredient solutions provider, playing into strong underlying consumer health and wellness trends” he said.
“We expect to deploy the capital received from the proposed transaction in investment to drive further growth and to return capital to shareholders.”
Separately, Glanbia unveiled its latest trading figures. These showed that group revenue was up 15.7% on a constant currency basis over the nine-month period to 2 October.
The GPN division saw revenues increase 23.2%, with like-for-like branded revenue growth of 25.2% driven by strong performance nutrition consumption trends across the Americas and International.
Meanwhile, the GN unit saw revenues rise 12.6% as consumer demand for healthier snacks and micro-nutrients remained strong.
“The group continues to navigate the various impacts of the Covid-19 pandemic well, delivering strong volume growth in the third quarter with our plants operating to plan and price increases implemented in response to cost inflation,” said Talbot.
“As we exit 2021 we will maintain our focus on driving top-line growth and are planning further pricing actions for early in 2022 in response to the continued inflationary environment.”
NAM Implications:
- The combination of dairy being a different business model…
- …and the increasing impact of plant-based products…
- ..makes this a sensible move for Glanbia at this stage.
- Rivals in Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals (GN)…
- …may feel the need to reassess relative competitive appeal vs a newly focused competitor?
