Re Joint Venture

Glanbia PLC
23 February 2004



23 February 2004


GLANBIA AND MILK LINK CREATE NEW VENTURE TO SERVE UK CHEESE MARKET.


Glanbia plc and Milk Link Ltd are pleased to announce today the formation of a
new joint venture company to serve the UK cheese market.  This is to be called
Cheese Company Holdings Ltd ('CCH' or the 'Joint Venture'), and will be 75 per
cent owned by Milk Link Ltd and 25 per cent by Glanbia plc.


Glanbia plc ('Glanbia' or the 'Group'), the international dairy, consumer foods
and nutritional products company, and farmer owned Milk Link Ltd ('Milk Link'),
a leading UK integrated dairy producer and processor, will together form CCH,
the second largest cheese producer in the UK, to address the strategic
objectives of both companies.  Glanbia Cheese Limited, the Group's pizza cheese
joint venture with Leprino Foods Company is unaffected by the transaction.


CCH will be established with a capital subscription of £16.9 million by Milk
Link for its 75 per cent controlling stake and an initial £5.6 million (€8.3
million*) by Glanbia for its 25 per cent interest.


Simultaneously, Glanbia will sell 100 per cent of Glanbia Foods Limited ('
Glanbia Foods') to CCH for £94.3 million (€140.1 million*), which is to be
satisfied by £59.3 million (€88.1 million*) in cash and an interest-bearing
Glanbia loan note of £35.0 million (€52.0 million*), commencing in 2008.


Both parties have also agreed to provide further financial support for the new
venture - Glanbia will contribute a total of £8.8 million (€13.1 million*) in
the form of a share premium spread over four years; while Milk Link will
contribute an annual amount of £2.5 million in connection with the exclusive
milk supply contract with Glanbia Foods, reflecting the synergies it expects to
generate.


Overall, this provides Glanbia with a net consideration of £79.9 million
(€118.7million*) for its 75 per cent stake in Glanbia Foods.


The Board of Directors of CCH will be comprised of six representatives from Milk
Link and two representatives from Glanbia.


CCH will be the second largest cheese producer in the UK, with strong positions
in cheddar, Stilton and British territorial cheeses, supplying the retail, food
service and ingredient sectors.  It will operate four cheese processing
facilities and a consumer packing facility in Great Britain, and employ
approximately 1,000 people.  It will remain an important route to market for
Glanbia's Irish cheese production.


Milk Link and Glanbia bring complementary strengths to CCH.  Glanbia Foods has
excellent cheese making skills and extensive facilities capable of producing the
full range of British cheeses, as well as strong relationships with major
retailers.  Milk Link has established expertise in developing and manufacturing
a wide range of dairy products, first class relationships with major retailers
and food manufacturing companies, a growing capability in category management,
sales and marketing and is a recognised expert in milk management and logistics.




Glanbia Group Managing Director, John Moloney, commented:


'This transaction will facilitate our strategic focus on high growth areas such
as consumer products, dairy ingredients and in particular the nutrition market.
At the same time, it allows us to maintain both access to the UK market for our
Irish cheese production and a continuous supply of products to serve our growing
nutritional, ingredients and mozzarella businesses.  We are confident that, as a
result of this transaction, Glanbia will retain a significant stake in a
stronger, more integrated business which will compete successfully in the UK
cheese market.'



Barry Nicholls, Milk Link Chief Executive commented:


'We are delighted to have agreed this joint venture with Glanbia, which confirms
Milk Link's position as the UK's premier farmer-owned integrated dairy business.
Moving into cheese production complements our substantial, existing liquid
milk and ingredients businesses, as well as our fresh dairy products business
through our strategic alliance with Arla Foods.  It also allows us to build upon
our increasingly strong customer relationships in the retail and food services
sectors.


'By securing an additional 620 million litres of milk processing capacity, we
are now able to process and add value to up to 80 per cent of our members' milk.
This allows them to benefit from a long-term secure outlet for their milk
together with the additional margins available from processing it into
added-value products.  Through this investment we are well placed to deliver our
long-term objective of providing financial security to our members'.


Glanbia's accounts for the year ended 3rd January 2004 are expected to include
turnover in respect of Glanbia Foods of £213.1 million (€302.1 million**), an
operating profit of £4.4 million (€6.2 million**) and a profit before tax of
£2.2 million (€3.1 million**).  The net assets of Glanbia Foods being disposed
of amount to £101.4 million (€143.7 million**) and any movement in net assets
(including working capital) before completion will be reflected as a
consideration adjustment.  Included in the transaction is the milk collection
and distribution business that serves Glanbia UK dairy operations, the employees
of which will be consulted under TUPE regulations.


Glanbia plc expects the sale to result in an exceptional charge of €49.1 million
(£35.0 million) in the accounts for the year ended 3rd January 2004, of which
€8.1 million (£5.7 million**) relates to a write down of assets and €10.5
million (£7.4 million**) relates to debt re-structuring, a contractual lease
obligation and transaction costs.  The balance of €30.5 million (£21.9 million)
relates to the write back through the profit and loss account of goodwill
previously written off against reserves.  The effect of this transaction on the
earnings of the Group is expected to be broadly neutral.


Glanbia will use the proceeds of this transaction to invest in growth
opportunities in its core markets.


The transaction is conditional on approval by the Irish competition authorities
and the Milk Link Member Council. It is expected that these conditions will be
fulfilled, and the transaction completed, by the end of March 2004.


Glanbia was advised on the transaction by Rabobank International.  Milk Link was
advised by Deloitte & Touche Corporate Finance.




  * Exchange rate as of 20 February 2004: €1.00 = Stg £0.673
 ** Exchange rate as of 3 January 2004:  €1.00 =Stg £0.7055
     (Glanbia year end reporting date)


For further information, please contact:


For Glanbia plc:


UK:           Hogarth Partnership      John Olsen             020 7357 9477
                                       Tom Leatherbarrow

Ireland:      Glanbia plc              Geraldine Kearney      00 353 56 7772357
                                                              00 353 87 231 9430


For Milk Link Ltd Enquiries:

              Good Relations           Benedict Payne         020 7861 3207
                                       Suzi Nealson


Notes to editors:


Cheese Company Holdings Limited


CCH will be established with a capital subscription of £16.9 million by Milk
Link for its 75 per cent controlling stake and an initial £5.6 million (€8.3
million*) by Glanbia plc for its 25 per cent interest, with a further £8.8
million (€13.1 million*) payable over four years.  In addition, CCH has secured
its own working capital facilities including stock and debtor financing lines
and a Glanbia plc loan note of £35.0 million (€52.0 million*).


Glanbia plc

Glanbia plc is an international dairy, consumer foods and nutritional products
company.  With a growing reputation for innovation and advanced manufacturing
processes, the Group is one of the world's leading cheese manufacturers and
suppliers of dairy-based nutritional ingredients, as well as being a major
European dairy processor.  Listed on the London and Dublin Stock Exchanges,
Glanbia  has a market capitalisation of £480.1 million (€713.4*).


Glanbia Foods Limited

Glanbia Foods is the second largest integrated cheese producer in the UK, with
strong positions in cheddar, Stilton and British territorial cheeses, supplying
the retail, food service and ingredient sectors.  It employs over 1000 people at
four cheese and dairy processing facilities in Great Britain, at Taw Valley,
Devon; Melton Mowbray, Leicestershire; Malpas, Cheshire; and Lockerbie,
Scotland, and a large, modern consumer packing facility in Oswestry, Shropshire.
Glanbia Foods' products are acknowledged to be of the highest quality, Taw
Valley cheddar having won 336 awards in the last 10 years.


Milk Link

Milk Link is owned by around 2,400 British dairy farmers who produce around 10
per cent of the UK's annual demand for milk, 1.4 billion litres.  Milk Link
exists to provide long term security for its dairy farmer members.


Milk Link manufactures a wide range of dairy products including long life milk,
creams, flavoured milks, custards, milk powders, yoghurts and soft cheeses,
supplying most major multiples and the food services sector.


Milk Link's business strategy has been focused on bringing processing assets
under farmer control.  This redresses the imbalance in the dairy sector whereby
disproportionately high levels of financial risk are placed on the farmer
producers while they receive an increasingly reduced share of the profit.


Creating a vertically integrated dairy business through the acquisition of
processing assets also brings farmers closer to consumers, enabling them to
produce top quality products that consumers want to buy.


Now nearing the completion of its acquisition strategy, Milk Link is close to
ensuring that it can process 100 per cent of its members' milk production, thus
providing price stability, maximum added value, and long term financial security
to its members.


Previous acquisitions under this strategy included the purchase in July 2002 of
Express Dairies' UHT business based at Crediton, in Devon and Kirkcudbright in
Scotland, and its ingredients business at Staplemead in Somerset.  These
acquisitions complemented the purchase in March 2002 of UHT processing business
Tanner Foods Ltd.


As part of an overall acquisitions strategy Milk Link has also recently:

•                Purchased Newlands Farm Limited: The Cornwall based fresh milk
processor was acquired in December 2003 and marked Milk Link's entry into the
fresh milk and liquid cream market, increasing its processing capacity by circa
25 million litres per annum.  The acquisition includes ownership of the
successful 'The Cornish Dairy' brand currently sold through Tesco.

•                Taken a controlling interest in Peninsula Milk Processors
Limited:  A further liquid milk processing company acquired in January 2004.
Based in Okehampton, Devon Peninsula will secure demand for 30-35 million litres
per annum of Milk Link milk output.


Milk Link has also entered into a number of strategic business alliances
including Staplemead Dairy Products Ltd. a major joint venture with Arla Foods.
The joint venture is focused upon the production of extended life flavoured milk
products and the production of 40-50 per cent of the UK's potted cream demand at
Milk Link's major production facility in Staplemead, Somerset.


Ends


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