Dawn Meats Group Selected As Alliance Group’s Preferred Long- Term Strategic Partner

The Board of Alliance Group is pleased to announce that its shareholders will vote on an opportunity to enter a strategic partnership with Dawn Meats Group – one of Europe’s leading red meat processors.

The proposed transaction would see Dawn Meats Group invest NZ$250 million to acquire 65 per cent of the shares in Alliance Group, valuing Alliance at NZ$502 million on an enterprise basis – subject to shareholder acceptances, High Court and regulatory approvals.

Proceeds from the transaction would be used to reduce Alliance Group’s short-term working capital facility by approximately NZ$200 million, accelerate the Board’s strategic capital expenditure programme and enable the distribution of up to $40 million to the co-operative, subject to shareholder livestock supply.

Alliance Group Chair Mark Wynne said the announcement comes after a two-year process to reset and recapitalise the business.

“Alliance was built by farmers for farmers and has a proud co-operative legacy. The process we have undertaken on behalf of our farmer-shareholders to meet our banks’ requirements means we are now a much fitter and stronger business. However, we need this investment
to provide certainty and confidence and ultimately unlock more value for our farmers.

“We are at a critical point where the business needs to evolve, but our commitment to farmers remains the same, and we believe Dawn Meats’ offer stands to secure and strengthen Alliance’s future.

“With Dawn Meats’ balance sheet power, strength in beef and market access across the United Kingdom and Europe, and Alliance’s strength in lamb and market access across China, wider Asia and North America, there are significant commercial and operational synergies at stake – with potential for our shareholders to see the value of their residual 35 per cent stake grow over the long term.

“The recapitalisation process explored several options in the interests of our shareholders and has successfully generated a very compelling offer, which the Board has unanimously endorsed. We encourage all shareholders to attend the upcoming information sessions and vote to accept the offer.”

The transaction is to be implemented via a Scheme of Arrangement and will require a minimum of 75 per cent shareholder acceptance of those who vote, and greater than 50 per cent of all shareholding voting yes at a Special General Meeting (or via proxy) to be held in
Invercargill in mid-October.

If shareholders do not support the proposed investment, the Alliance Board would be obligated to enter into a process led by its banking syndicate, which may involve possible asset sales, site closures and further cost-reduction initiatives.

“Dawn Meats Group has a successful operating and investment track record in Ireland, the UK and the European Union,” said Niall Browne, Chief Executive of Dawn Meats Group.

“Having the ability to grow in partnership with some of New Zealand’s leading farmers and create year-round supply for our customers between the Northern and Southern Hemispheres is an opportunity we are deeply committed to and take very seriously.

“Our ‘can do’, keep-it-simple and commonsense culture aligns naturally with Alliance. The opportunity here is to create a dynamic industry competitor with a unique combination of customer relationships, resources, skills, routes to market and industry knowledge that will give us a powerful competitive edge, both locally and globally.”

Dawn Meats Group is a family-owned business established by three farming families in Waterford, Ireland, in 1980. It has 24 facilities and over 8,000 employees in 10 countries, processing more than 3.5 million sheep and one million cattle per annum, with a core annual turnover in excess of NZ$5.8 billion.

Dawn Meats has a stable of strong and well-recognised brands, including operating the Dunbia brand in the UK. Through these businesses, Dawn Meats Group serves major retailers, manufacturers and foodservice operators in over 50 countries.

Mr Wynne acknowledged the hard work of Alliance’s management, operational and Board teams to position Alliance for high-quality external investment.

“In the last 18-24 months, we have implemented a huge amount of change across every aspect of the business. This is an opportunity to lay an enduring foundation that will offer an opportunity for Alliance to thrive and deliver more value to our farmers.”

Key dates (indicative, subject to change)

ENDS

Notes to editors

About Alliance
Alliance is New Zealand’s largest processor and exporter of sheepmeat, and a key producer of pasture-fed premium beef with its quality produce exported to over 65 countries. Owned by approximately 4,300 shareholders, the company operates six processing plants in New Zealand.

About Dawn Meats
Dawn Meats is the supplier of choice to a range of leading supermarket, foodservice and manufacturing businesses, exporting to more than 50 countries.

As a family-owned business, Dawn Meats remains true to its farming heritage through the close relationships it has forged with over 40,000 family farms from which it directly sources grass-fed cattle and lamb for processing at its 11 Irish and 13 UK sites.

Dawn Meats was established in Co Waterford, Ireland, in 1980, and has grown to a business with over €3 billion in annual revenue, employing over 8,000 staff in ten countries.

The company works with some of the world’s leading food companies who are attracted by a commitment to sustainability and quality.

Trading as Dunbia in the UK and Dawn Meats in Ireland, the combined businesses process
approximately 1m cattle and 3.5m sheep annually.

Dawn Meats Group selected as Alliance Group’s preferred long- term strategic partner

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