Food group Glanbia is proposing the sale of 60% of its domestic dairy to its largest shareholder in a shift of focus towards its US cheese and international nutritionals businesses.
After months of talks Glanbia has agreed to sell a direct stake in Dairy Ingredients Ireland, the country's largest dairy, to Glanbia Co-op Society Ltd, a farmer-led co-operative which currently owns 54.4% of Glanbia.
The co-op will pay approximately €44.5m (£35.2m) for a 60% stake in Dairy Ingredients Ireland, which the company said will become a joint venture focused on boosting its dairy processing capacity in Ireland ahead of the abolition of European Union milk quotas in 2015.
Under the deal the co-op said it is also due to sell 3% of Glanbia, cutting its stake to 51.4%, and would then hold a second vote of its members to cut its stake by another 10% through a sale of 3% and the disbursement of 7% among members.
The initial deal needs to secure the agreement of 50% of co-op members, a lower threshold than the 75% required in a similar vote in 2010 which failed. Asked about the chances of approval, Glanbia's chief executive John Moloney said he was "confident the deal will meet the needs of a lot of stakeholders".
If it is approved the deal "will underpin the successful long-term international growth strategy of the group, which is the driver of performance", Moloney said.