UK dairy group Dairy Crest is to sell a 50% stake in Irish firm Wexford Creamery to Wexford Milk Producers (WMP) for around EUR9m (US$12.9m).
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If successful, WMP will become the majority shareholder in the creamery by holding 70% of the stock. Dairy Crest will retail a 30% shareholding.
Dairy Crest said the proposed sale of part of its shareholding in the creamery will allow it to concentrate on its key brands.
The Clover butter maker said the deal “facilitates the recent trend for dairy farmers to own more of the milk processing supply chain”.
Dairy Crest will use the cash proceeds from the proposed sale to repay bank debt.
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By GlobalDataMartyn Wilks, executive managing director of Dairy Crest’s foods division and outgoing chairman of Wexford Creamery, said: “The strategy of Dairy Crest’s foods division is to increasingly focus on a small number of key brands and the transaction is another step in this direction. We will continue to work with WMP for the benefit of the creamery.”
Dairy Crest will continue to provide a range of services to Wexford, including packing and distribution and will sell Wexford branded cheese in the UK on behalf of the creamery.
WMP chairman Michael Vaughan said: “This is a tremendous opportunity for WMP to determine our own future. We are pleased that Dairy Crest will retain a stake in the creamery and will assist in the development of the business.”
