Dawn Meats has confirmed it is taking a majority stake in New Zealand peer Alliance Group subject to agreement by the cooperative’s shareholders.
Ireland-based meat processor Dawn Meats is paying NZ$250m ($150m) for a 65% interest in Alliance Group under terms that are slightly different to those reported in the media last week.
The transaction, which values Alliance Group at NZ$502m on an enterprise basis, is subject to approval from its shareholders at a meeting in mid-October, the New Zealand high court and competition regulators, according to a joint statement.
Alliance Group said the deal will require a minimum 75% acceptance from shareholders who vote on the transaction.
The co-op warned that if shareholders do not support the proposed investment, described as a “strategic partnership” with Dawn Meats, the board may need to consider “possible asset sales, site closures and further cost-reduction initiatives”.
Alliance Group chair Mark Wynne said the deal follows a two-year effort to reset and recapitalise the business.
The company, owned by around 4,300 shareholders, generated revenue of NZ$1.8bn in 2024, but posted a loss after tax of NZ$95.8m.
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By GlobalDataIn a December statement 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 at the time: “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.”
In the statement yesterday (12 August), Alliance Group said it will use the proceeds to “reduce” its short-term working capital facility by approximately NZ$200m.
Additionally, the funds will be used to “accelerate the board’s strategic capital expenditure programme” and allow for the distribution of up to NZ$40m to shareholders.
Wynne said the recapitalisation “means we are now a much fitter and stronger business” but “we need this investment to provide certainty and confidence and ultimately unlock more value for our farmers”.
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.
Wynne added: “With Dawn Meats’ balance sheet power, strength in beef and market access across the United Kingdom and Europe, and Alliance Group’s strength in lamb and market access across China, wider Asia and North America, there are significant commercial and operational synergies at stake.”
The New Zealand co-op claims to be the country’s “largest” processor and exporter of sheep meat and a “key producer” of pasture-fed “premium” beef. It operates six processing plants and exports to over 65 countries.
Niall Browne, CEO of Dawn Meats, said: “Having the ability to grow in partnership with some of New Zealand’s leading farmers and create year-round supply for our customers between the Northern and Southern Hemispheres is an opportunity we are deeply committed to and take very seriously.”
