POTENTIAL GLANBIA DEAL WOULD SEE FIRM PROGRESS ITS US CHEESE GROWTH STRATEGY - Food group Glanbia says its major shareholder, the Glanbia Co-operative Society - which owns over 54% of the group - is in talks to buy its Irish operations. This follows Greencore's exit from sugar and malt, and could mean another another big Irish food firm moves away from its farming roots. Farmers claim there is a conflict of interest, as 14 of the plc's 18 board members have a dual mandate, as they are nominated by the co-op.
The Glanbia group also had results out today which showed that profit before tax fell by 19% to €97.4m, while operating profit fell 17% to €111.2m.
John Moloney, Glanbia's chief executive, says that the 'potential transaction' could be a win-win situation for the farmers. It would give them 'control and ownership' of the Irish businesses that have the most relevance to them. For the plc, he says, it would increase its flexibility, and progress its growth strategy which is to develop its US cheese and and global nutritionals business.
Mr Moloney said it would be premature to speculate on the financial shape of any deal, but that it could go ahead towards the middle of this year. Glanbia's Irish business is made of dairy ingredients, consumer products and agribusiness; its properties, joint ventures and business operations.
The Glanbia boss says that because of changes to the Common Agricultural Policy in 2007 the operating environment for farmers and businesses is changing. He said the pragmatic approach is to ask what is absolutely relevant in terms of ownership to farmers, when at the same time the plc has an attractive growth strategy and the potential to move forward.
He says that Ireland could be very much part of the knowledge economy in terms of food production and innovation. He says the dairy industry here needs rationalisation and reorganisation, so that there would be a streamlined structure from farm right through to markets around the world. He adds that innovation and rationalisation did not necessarily mean there would be fewer jobs in the sector.
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MORNING BRIEFS - Oil firm Tullow says its profit before tax fell by 93% from £299m sterling to £20m for 2009. Its operating profit dropped 68% to £95m from £300m. Aidan Heavey, Tullow's CEO, said it was a strong performance and today's results reflect a period of financial transition. He said the firm's future growth is underpinned by a strengthened capital structure and the performance prospects for the group are very strong.
*** We have been hearing this week of talk of a new financial body, the European Monetary Fund, which could rescue debt-hit countries like Greece. Speaking in Strasbourg yesterday, European Commission President Jose Manual Barrosso, said it was an interesting idea, but it would be a long-term proposal that would require a change in the Treaty.
*** On the currency markets, the euro is trading at $1.3579 cents and 90.91 pence sterling.
