Dawns Meats is set to acquire a controlling stake in Alliance Group as the farmer-shareholders of New Zealand’s largest processor and exporter of sheepmeat voted in favour of the proposed NZ$250m (£110m) investment deal.
The result at a special general meeting means Dawn Meats will buy a 65% holding in Alliance, with the farmer owners retaining the remaining 35%.
A total of 2,675 shareholders voted, representing more than 88% of all shares on issue. Of these, more than 87% voted in favour of the proposal, meeting the threshold required under the Takeover Code.
Alliance operates six processing plants in New Zealand and exports sheepmeat and beef to more than 65 countries.
The group plans to use proceeds from the transaction to reduce its short-term working capital banking facility by NZ$200m, with the balance directed toward accelerating the board’s strategic capital expenditure programme.
Farmer-shareholders will also benefit from distributions of up to NZ$20m in the current and next financial year.
The potential deal was announced in August by Dawn and Alliance.
Dawn Meats CEO Niall Browne said: “We are pleased and excited by the outcome of the vote by Alliance’s farmer-shareholders and we now look forward to maximising the potential of the new opportunities this strategic partnership will unlock in the future for both Dawn Meats and Alliance.
“Following an extensive engagement and due diligence process, Dawn Meats put forward a strong strategic partnership proposal involving a significant investment in a world-class company that shares our values, ambition and commitment. I would like to thank Alliance’s farmer-shareholders for carefully considering our offer over the last two months and supporting it to such an extent.”
Established in Ireland in 1980, Dawn Meats generates more than €3bn in annual revenues and employs in excess of 8,000 staff in 10 countries, including in the UK where it trades as Dunbia. The company processes about one million cattle and 3.5 million sheep a year.
“Dawn Meats has a proven track record of successfully partnering with other businesses and we believe this joint venture with Alliance will assist in further growing and developing what is an excellent New Zealand business with a proud legacy of processing and exporting the highest-quality grass-fed lamb, beef and venison,” Browne added.
“Dawn Meats already has a strong operations network in Ireland, the UK and in the EU. Having the ability to now grow in partnership with some of New Zealand’s leading farmers and create a year-round supply for our customers between the northern and southern Hemispheres is a fantastic opportunity and one our customers are already responding to.
“We believe this partnership will create a dynamic industry competitor with a unique combination of customer relationships, resources, skills, routes to market and industry knowledge, giving both Dawn Meats and Alliance a powerful competitive edge, locally and globally.”
Confidence in the future
Alliance chairman Mark Wynne said the result of the vote demonstrated strong farmer confidence in the company’s future direction.
“Our farmer-shareholders have given a clear mandate for Alliance to move forward in partnership with Dawn Meats. This is a vote of trust in our people, our operations and our vision,” he added.
“We’re really excited about the potential for this partnership and what the future holds for Alliance and Dawn. This essential investment will strengthen our financial position, enhance our operational capability and enable us to capture more value in market for our farmers and the country. Importantly, the agreement also preserves farmer ownership, with a continuing 35% shareholding and strong governance rights.”
Wynne said the outcome followed a comprehensive two-year process to reset and recapitalise the business.
“The board explored every option to secure Alliance’s future. The Dawn Meats proposal stood out as the best strategic and financial path forward.
“By combining Alliance’s lamb expertise and global reach with Dawn Meats’ strength in beef and market access across Europe and the UK, we can unlock significant commercial and operational synergies.
“This partnership gives our farmer-shareholders the opportunity to see the value of their residual 35% stake grow over the long term.”
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