French co-op bids £101m for Greencore's malting barley plants

ALTHOUGH the move still has to get shareholder approval, a bid of £101 million was made yesterday by French farming co-operative Axéréal to take over the malting barley operations of Greencore.

If the deal goes through, it will create one of the biggest malting companies in the world.

Greencore has two malting plants in Scotland, at Buckie and at Glenesk, Montrose. Between them, the Scottish plants employ 27 staff. In addition, Greencore has another five malting plants, located in the UK, Ireland and Belgium.

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Axral was formed in June 2009, as a result of a merger between two leading French co-operatives, Agralys and Epis Centre.

This merger has established Axral as one of the leading players in the French grain sector, with a collection of more than five million tonnes of grain and with trade exceeding eight million tonnes and a total turnover of 2.8 billion (2.4bn).

Axral has a number of significant operations in the agricultural processing industries of malting, flour milling and animal feed.

Axral acquired Boortmalt in 2004, and since that time has invested both organically and by acquisition to develop a current malting operation of 620,000 tonnes, which includes plants in Belgium, France, Hungary and Croatia.

More than 70 per cent of current capacity is less than ten years old, underlining its commitment to investment in the business.

Provided the deal is approved by shareholders at an extraordinary general meeting of the company in early March, Greencore Malt when combined with Boortmalt will result in a business of more than 1.1 million tonnes, establishing it as the fifth largest malting operation globally.

The enlarged organisation will operate under the name Boortmalt.

Greencore Group chief executive Patrick Coveney said: "With developments in the malt market and Greencore's increasing focus on its core convenience food business in both the UK and US, now is an appropriate time to sell the business

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"We believe the transaction agreed with Axral fairly reflects the value of the business and, moreover, will tighten our strategic focus, strengthen the group's balance sheet and provide capital to fund our future growth plans."