Glanbia hopes the move will allow it to focus more on its high-margin U.S. cheese and international nutritionals businesses away from its lower margin dairy processing.
Members of Glanbia Co-op Society voted to approve the purchase of 60% of Glanbia subsidiary Dairy Ingredients Ireland via a new joint venture. Glanbia will retain the remaining 40%.
The deal, which will reduce the co-op's stake in Glanbia to 51.4% from its current 54.4% is expected to be approved in a vote of Glanbia shareholders on November 20.
The vote paves the way for a second ballot for the co-op to cut its stake by a further 10% to 41.4%. That vote will be held in two stages on November 28 and December 12.
That vote, however, would require the approval of 75% of shareholders, above the 71% who voted in favor of the joint venture.
Glanbia chief executive John Moloney said the vote marked a “significant and penultimate step” to the creation of the joint venture, which he said would allow the co-op’s farmers to boost processing capacity and maximise the benefits of the abolition of European Union milk quotas in 2015.