Lakeland and LacPatrick merger gets boardroom backing

Each company operates on a cross-border basis

Lakeland and LacPatrick dairies are set to merge after unanimous backing from their respective boards.

The proposal will now go before the co-operatives' shareholders for a vote at the end of the month with the final decision subject to regulatory approval.

The proposed new co-operative would adopt the name Lakeland Dairies.

Both companies entered into exclusive discussions on a possible merger in June.

Each operates on a cross-border basis and export the majority of products to global markets.

If the merger is approved, the new co-op will have a supplier base of more than 3,200 farmers producing a milk pool of more than 1.8bn litres annually - making it the second largest dairy co-operative in Ireland after Glanbia plc.

It will have a combined annual turnover of more than €1bn (£886,398,917) .

The proposed new co-operative will adopt the name Lakeland Dairies

Monaghan-based LacPatrick Dairies was formed in 2015 following a merger of Ballyrashane Co-op and Town of Monaghan Co-op.

It now employs more than 400 people.

It has three processing plants on both sides of the Irish border at Monaghan, Ballyrashane, and Artigarvan which underwent a £30m expansion in 2017.

In April, LacPatrick announced that it was open to the possibility of a merger following approaches from "international and national" dairy companies.

This was followed by the departure of its Chief Executive Officer (CEO), Gabriel D'Arcy, in August.

Lakeland Dairies also came about through a merger in 1990.

It now employs more than 800 people across its food service, food ingredients, and agri-business divisions.

In September 2015 it opened a £8m global logistics centre in Newtownards, County Down.

The amalgamated co-op will be led by Lakeland Dairies current CEO, Michael Hanley.

He said the merger is in the "best interests" of farmers, adding that the expanded milk pool will allow for them to develop new products.

"It gives our farmers the necessary security to make long term business decisions and provides stability for continuing progress in dairy farming for the next generation," said Andrew McConkey, chairman of LacPatrick Dairies.