The green light has been given by the governments of the UK and Ireland for dairy cooperatives Lakeland and LacPatrick to merge.
Lakeland Dairies and LacPatrick have jointly welcomed regulatory approval by both the UK's Competition and Markets Authority (CMA) and Ireland's Competition and Consumer Protection Commission.
Both have ruled that the merger can now be completed. They ruled that competition would not be adversely affected as a result of the merger and both cleared the transaction unconditionally.
The regulatory authorities’ clearance was the last significant hurdle for the merger to go ahead.
In October 2018, the Lakeland and LacPatrick shareholders voted 97% and 96% respectively in favour of forming one of the largest dairy processors in Europe.
The new society – to be called Lakeland Dairies Co-Operative Society Limited – will be the second largest dairy processor on the island of Ireland with a cross-border milk pool of 1.8bn litres, produced by 3,200 farms from 15 counties. It will have a combined annual turnover in excess of €1bn.
Alo Duffy, Chairman of Lakeland Dairies said: “The merger will help us to create efficiencies across our organisation which will enhance value and maximise available market returns for the benefit of milk producers.
“I express our strong appreciation to the shareholders of both societies for their confidence in this historic development which will underpin the long term sustainability of our dairy farming enterprises for the future.”
Andrew McConkey, Chairman of LacPatrick Dairies added: “The merger 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.
“With a large milk pool and well-invested dairy processing sites on both sides of the border, the new Lakeland will be a co-op of considerable scale.”
Formed in 2015, LacPatrick supports 700 local farmers and possesses processing facilities on both sides of the Irish border.
Lakeland Dairies came about through a merger in 1990. It employs more than 800 people across its divisions.
Ulster Farmers’ Union (UFU), deputy president, Victor Chestnutt said the merger will bring 'challenges and opportunities' for dairying in Northern Ireland.
He said: “The new business will have a strong balance sheet to make progress and acts quickly to develop a plan to drive efficiency.
“Centralising and rationalising its operations must be at the core of the merger agenda. An improved milk price will stabilise the new Lakeland milk pool.”