NO AMALGAMATION

Gisborne Herald, Volume LXVI, Issue 20024, 24 August 1939, Page 15

NO AMALGAMATION

OTAGO DAIRY COMPANIES

SCHEME NOT PRACTICABLE

(Per Press Association.) DUNEDIN, last night

Following a report submitted by the auditors, it was decided by a meeting of the directors of the Co-operative Dairy Company of Otago, Limited, that their company should not amtflgamate with the Taieri and Peninsula Milk Supply Company, Limited.

“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 over £30.000 would have been necessary. Low savings do not warrant the shareholder 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 receiving perhaps only 10s in the £.

“It was also found that on the total cream collection cost of over £14.000 the saving was, negligible. This is contrary to the false belief f h,at 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 had a merger been effected,” continued Mr. Blackie. “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.”