Dawn Meats is reportedly seeking to acquire a majority stake in Alliance Group, the meat cooperative in New Zealand.
Ireland-based meat processor Dawn Meats declined to comment on a report from the Irish Times, which said the company had emerged as the leading bidder to acquire shares in the group ahead of the Saudi Agricultural and Livestock Investment Company (Salic).
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Sources for the Irish Times suggested Dawn Meats’ offer is subject to a shareholder vote at the farmer-owned co-op. The publication added that it ‘understands the bid involves a payment’ of NZ$270m ($159m) for a 70% interest in Alliance Group.
A meeting of the co-op’s members is slated for 12 August to discuss the offer, the sources added.
Alliance Group generated revenue last year of NZ$1.8bn but posted a loss after tax of NZ$95.8m.
County Waterford-based Dawn Meats, which trades as Dunbia in the UK, is a family-owned processor of lamb and beef with an annual turnover of €3bn ($3.4bn), according to its website. The business operates 11 facilities in Ireland and 13 in the UK supplying the retail and foodservice channels, as does the Alliance Group.
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By GlobalDataDawn Meats said it does not comment on market speculation when contacted by Just Food. Salic, which is owned by Saudi Arabia’s Public Investment Fund, had not responded to a request for comment at the time of writing.
Meanwhile, Alliance Group confirmed in its annual results announcement in November that the business had hired Craigs Investment Partners to “explore external capital-raising options”.
Chairman Mark Wynne said in that same statement: “While we are at the very early stages of the process, we’ve seen encouraging interest from both international and domestic parties but for reasons of commercial sensitivity, we will not comment on specific opportunities.
“We will be assessing any external opportunities based on strategic fit, value and expected benefits for the company and our shareholders before making any decisions. Ultimately, the final decision will rest with our farmer shareholders.”
Asked by Just Food to comment on the Dawn Meats’ interest, Wynne responded in a statement: “Our goal is to secure more than NZ$200 million to strengthen our balance sheet and provide a much more stable financial foundation for the business.
“Because of the commercial sensitivities involved and the confidentiality agreements now in place, we are limited in how much we can share.”
He added that following this month’s meeting with farmers, a “series” of roadshows will be held before a vote is put to shareholders in the “next few months”.
In 2023, Alliance Group also posted an after-tax loss amounting to NZ$70.1m based on a turnover of NZ$2bn.
The co-op also revealed in its 2024 financial report that it had incurred costs, including those connected with the closure of a local facility, which gave rise to an underlying loss after tax of NZ$47.6m for that year.
“The loss includes one-off post-tax costs of NZ$48.2m in relation to business restructuring costs and other one-off adjustments, including the costs associated with plant rationalisation and redundancies following the closure of the company’s Smithfield plant in Timaru,” the company said.
Commenting alongside chair Wynne, CEO Willie Wiese said in the results statement that “global markets remained exceptionally challenging with prices remaining weaker as consumers continued to keep a tight rein on spending”.
Wiese added sales and volumes “nearly halved” in its largest market of China. However, demand for beef in the US was robust driven by a drought in that country.
In an update provided in December following Alliance Group’s annual general meeting, the co-op said it had “turned a corner on a challenging two years following a comprehensive re-set over the past 18 months and is forecasting a return to profitability”.
Wynne added: “Alliance has taken decisive steps to re-set the business and position the company for future success after a tough period for the global red meat sector, in particular for lamb, our largest product group.
“The board’s preference is for Alliance to remain a 100% farmer-owned co-operative. However, raising the desired capital from farmer-shareholders now looks extremely difficult. We are early in the external capital raise process being led by Craigs Investment Partners.”
