Dairy merger to go to vote in June

12.00 PM

Directors of New Zealand Dairy Group and Kiwi Cooperative Dairies have set the date for shareholder voting on the formation of New Zealand's biggest company - the Global Dairy Company.

The Chairman of Global Dairy Company, John Roadley, today announced that the vote - originally planned for mid-May - would go ahead on June 18.

Mr Roadley said the vote was the last opportunity to maintain the unity of the dairy industry under the ownership of New Zealand dairy farmers.

"It is our last chance to build a 100 per cent New Zealand-owned multinational capable of footing it with the best in the world."

He said there would not be another merger proposal if the current one fails.

"We would risk having two smaller companies without the scale to compete globally becoming vulnerable to outside control."

Mr Roadley said the merger process had been difficult, but the two companies, the Government and the Opposition had now all agreed on the best way forward.

"The key decision rests — as it should do — with New Zealand dairy farmers."

The appointment of a new chief executive for Global Dairy Company had been a sticking point in the merger, but the company has now agreed on an appointment process.

A board subcommittee has been established to work on setting criteria for selecting a chief executive.

The criteria will be handed to a multinational recruitment firm and from their work the subcommittee will make a recommendation to the Global Dairy Company board.

"We expect an appointment to be made by the end of June," said Mr Roadley.

Three independent directors - Graeme Hawkins, John Hood and Michael Smith - have also been appointed to "move the merger forward".

Mr Hawkins and Dr Hood are part of the board subcommittee - with Mr Roadley, Kiwi Cooperative Dairies chief executive Greg Gent and New Zealand Dairy Group chairman Henry van der Heyden - that will work on the appointment of a chief executive.

Despite the risks, he said the merger was neccesary "in a world that is rapidly globalising and where our competitors are increasing their scale every day".

Directors were keenly aware that they would need to manage risks associated with having one company so dominant in the industry, Mr Roadley said.

"As a board, we have to manage those risks, with independent valuation each year and tough international benchmarking. Directors all know that they are going to have to put extra effort into making sure they stay in touch with the farmers who own the industry."

New Zealand Dairy Group will hold its special meeting at the Totara Christian Centre, Matamata, with links to Ashburton and Invercargill.

Kiwi Co-operative Dairies will hold its special meeting at the Hawera Sports Complex.

Shareholders who prefer to appoint a proxy must return a form to their company by 10.30 am on June 16.

Shareholders will receive a newsletter summarising these announcements from today and the formal Merger Proposal should begin arriving on farms from 1 June.