AMALGAMATION [REJECTED

Press, Volume LXXV, Issue 22796, 23 August 1939, Page 6

AMALGAMATION [REJECTED

TWO DAIRY COMPANIES IN OTAGO "MOVE NOT JUSTIFIED BY SAVINGS” DUNEDIN. August 22. •After a report had been'submitted by the auditors, it was decided by a meeting of directors of the Co-opera-tive Dairy Company, of Otago, Ltd., this afternoon, that their company should not amalgamate with the Taieri and Peninsula Milk Supply Company, Ltd. “The savings shown in this report from the joint auditors of the two companies do not justify amalgamation,” said Mr W. Blackie (chairman of the Co-operative Dairy Company),' when asked to comment on the decision: “In theory.it was agreed that savings could be effected by amalgamation, but examination has convinced the directors that "this merger is not. possible in practice, as an expenditure of more than £30,000 would have been necessary. The low savings do not warrant the- shareholder suppliers of the cooperative dairy company going ahead. The basis of capitalisation would . be. most difficult, and might be a bigger stumbling block, necessitating these shareholders receiving perhaps only 10s in the £. ■ It was also found that oh the total cream collection cost of more than £14,000 the saving was negligible. This is contrary to the false belief that a great deal of overlapping would take place if the two. companies did not amalgamate. is not so. Of the total paid-up capital of more than £52,000 belonging to both companies. one half might have to be written off. “Had * the merger been effected, .the scheme also meant the entire dismantling of one large and efficient company in Dunedin, and expensive alterations and reconstruction elsewhere. Considering the circumstances from every aspect. the board .decided to carry on the company as usual.*? ' \