NOT TO MERGE

Evening Post, Volume CXXVIII, Issue 46, 23 August 1939, Page 6

NOT TO MERGE

DAIRY COMPANY'S DECISION

EXPENSE NOT WARRANTED

(By Telegraph—Press Association.) DUNEDIN. August 22. After a report had been submitted by auditors, it was decided by a meeting of directors of the Co-operative Dairy Company of Otago. Ltd.. this afternoon that their company should not amalgamate with the Taieri and Peninsula Milk Supply Company, Ltd. "Savings shown in this report from the joint auditors of the two companies do not justify amalgamation," said Mr. W. Blackie, chairman of the I Co-operative Dairy Company, when asked to comment £>n the decision. "In thfeory it was agreed that savings could be effected by amalgamation, but examination has convinced the f directors that this merger is not possible in practice, as expenditure of more than £30,000 would have been necessary. The low savings do not warrant shareholders and suppliers of the Co-operative Dairy Company going ahead. Also the basis of capitalisation would be most difficult, and might be a bigger stumbling block, [ necessitating these shareholders re- | ceiving perhaps only 10s in the £. It was also found that, on a 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,. This is not so. Of the total paid-up capital of over £52.000, belonging to both companies, one-half might have to be written off were the merger effected. The scheme also meant the entire dismantling ofi 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."