The proposed amalgamation of Arrabawn and Tipperary Co-Op, to create the biggest processor in the county and fifth biggest in the country, is the right option at the right time according to Chairman of Arrabawn Edward Carr.
The milk supplying shareholders in both Co-Ops are to vote at Special General Meetings on November 7th to approve the merger which has the approval of both boards. The Tipperary Co-Op shareholders are to vote at their special meeting at noon on November 7th at the company offices on Station Road, Tipperary town. A 75% margin in favour is required in both cases.
The deal will be beneficial for both Co-Ops with the potential for processing efficiencies and a wider product mix, subsidiaries in Spain and France offering potential for growth. For Tipperary Co-Op the deal is a lifeline as due to interest payments and rising energy costs the Co-Op was unable to pay milk suppliers a great price for milk and is at risk of losing suppliers.
Edward Carr, who farms in Kilcommon, right on the border of the two Co-Ops, says that the amalgamation is in the best interest of suppliers. Mr Carr highlights that “the due diligence process assessing the merger has validated the business opportunity for both co-ops from this amalgamation” and adds that he is left in no doubt whatsoever “that it is the right thing at the right time, with the right partner”.
The new entity will be known as Arrabawn Tipperary Co-Operative Society, it will have 1,400 milk suppliers and an expected annual turnover of over €700M. Tipperary Co-Op shareholders will own, in aggregate, 24.5% of the new Society with Arrabawn Shareholders owning 75.5%.
Concerns remain about the impact the merger may have on staff levels in both organisations in the short term as savings of up to €8m are being targeted in the Tipp Co-Op business.
