The A$1.31bn sale of the troubled co-op was approved by nearly 98% of the vote.
Shareholders at Australian dairy co-op Murray Goulburn have approved the sale of their co-operative’s operating assets and liabilities to Canadian dairy giant Saputo.
A resolution to sell the co-op to Saputo for A$1.31bn was approved by nearly 98% of the vote at an extraordinary general meeting in Melbourne. The meeting also also approved an initial distribution of 80 cents a share or unit within 10 business days of the completion of the asset sale.
The sale, which is expected to be finalised on 1 May, has also been given the green light by Australia’s competition regulator, on the understanding that Saputo will then sell Murray Goulburn’s Koroit factory.
The deal has still to be approved by the Foreign Investment and Review Board.
Murray Goulburn chief executive Ari Mervis told the meeting, of 100 shareholders and unit holders, that Saputo was a trusted dairy processor in Australia.
“Saputo recognises that in order to run efficient production facilities they need profitable dairy farms and a profitable industry, supported by strong milk prices,” he said.
Former chair and dairy farmer Ian MacAulay said it was a “very sad day” but paid tribute to the the co-op’s staff.
Murray Goulburn will keep about $235m from the sale, with $195m set aside for any legal action resulting from crisis which brought about its downfall. Other money would be used for operational costs, including the winding up of the co-op.
The MG Unit Trust will continue to operate on the Australian Securities Exchange until it is delisted.
Murray Goulburn was Australia’s biggest co-op. and at its peak in 2014-15, collected more than 3.6 billion litres of milk from Australian dairy farmers – enough to fill 1,440 Olympic size swimming pools.
It partially listed on the stock exchange in July 2015, but began to struggled in a volatile global dairy market, forcing it to cut its milk prices retrospectively.
The move, which drove many farmers out of the industry, into debt or to quit the co-op, was condemned at the time by union leaders.
In a message to members, supplier director Craig Dwyer said the vote marked a “momentous” day.
“Murray Goulburn has meant many things to many people; suppliers and employees alike,” he said. “It is not about who has supplied or worked for the co-op for the longest, or who has the most shares. It is about the farms, the factories and the families.
“The MG family encapsulated all… from the night shift operator, the tanker driver, the field service team, right up to senior management … To all those generations that preceded us to help build the MG we have all belonged to, I thank you.”
He said the co-op’s farms and factories would go on to play a “vital role in producing world-class milk and dairy products” to a growing global market.
“I am confident that we are transitioning our assets and brands to an ethical, family-oriented business,” he added.
Saputo’s chief executive and chairman Lino Saputo said: “This step was a significant milestone for Saputo in the process of completing our acquisition of MG.
“We would like to sincerely thank MG shareholders for their support and confidence. We are committed to contributing to the sustainability of the Australian dairy industry and look forward to building strong relationships with our suppliers by treating them fairly, with respect and loyalty.”
By: Miles Hadfield
Source: Co-operative News