The farmer-shareholders of Dairy Farmers have approved the proposed takeover of the Australian dairy cooperative by National Foods.

On 25 August, Dairy Farmers announced that National Foods had put together an offer of A$910m (US$773.8m) for the company.

The offer represents a cash consideration of A$5.65 per share and includes a fully franked special dividend of up to A$0.59 a share payable by Australian Co-operative Foods (ACF), the owner of Dairy Farmers.

In a related agreement, National Foods and Warrnambool Cheese and Butter Factory plan to establish a joint venture to operate the cheese business of Dairy Farmers. The joint venture between National Foods and Warrnambool will own, license and market Dairy Farmers' cheese products.

National Foods has also agreed to sell the licence for Ski yogurt to New Zealand's Fonterra.

The company will integrate the remainder of Dairy Farmers' liquid milk businesses into its operations.

The proposal was passed with a total of 96.3% of votes cast in favour of the deal. For the sale to go ahead, 75% of votes were required.

National Foods, owned by Japanese conglomerate Kirin Holdings, has already secured competition clearance but still requires court approval to complete the deal. A hearing is scheduled to go before the Supreme Court of New South Wales next Tuesday (18 November).

"This is a significant milestone for ACF and National Foods, and we thank ACF members for their support and commitment to the opportunity which this now provides," National Foods MD Ashley Waugh said. "We still have some hurdles to clear, but should we succeed in bringing National Foods and ACF together, we will work with the management and employees of Dairy Farmers to ensure a smooth transition."

Warrnambool was also quick to welcome the news.

"Warrnambool Cheese and Butter Factory Company (WCB) welcome the news that Dairy Farmers' shareholders have approved the scheme, which represents an important milestone in the proposed acquisition of Dairy Farmers by National Foods," the company said in a regulatory filing.

"WCB confirms that discussions between WCB and National Foods on forming a joint venture relating to the existing cheese business of Dairy Farmers are progressing well," the company added.