Connacht Gold is to buy Donegal Creameries’ liquid milk business, as first revealed on donegaldaily.com
Industry insiders confirmed to us last night that the deal is ‘done’ and is now at the “due diligence stage” – this is the process where Connacht’s accountancy team does a review of the Donegal Creameries accounts before a sale price is agreed.
The Irish Independent today also confirmed our story, reporting that Donegal Creameries has a milk pool of close to 125m litres, one third of which is processed into fresh milk and yoghurts at its Killigordon site. The remainder is sold to other co-ops, including Connacht Gold, for processing.
Profits from the milk division at the local company fell from €2.1m in 2009 to just €20,000 last year.
Connacht Gold has been aggressively growing its market share of retail milk sales in recent years and a possible deal with Donegal would give the western co-op a commanding grip on the northwest of the country, said the Indo.
