The massive corporate merger of Waterford Foods and Avonmore Creameries received a resounding endorsement at meetings of the shareholders of both groups yesterday and will now be submitted for approval by the regulatory authorities in Britain and Ireland.

The combined businesses, to be known as the Avonmore Waterford Group, will have a turnover of some £2.5 billion. It will constitute the largest dairy processor in Britain and Ireland, one of the biggest in Europe and, it is calculated, probably the fourth largest in the world.

The result of the key vote clinching the merger was announced shortly after 3 p m at a special general meeting in Waterford attended by almost 3,200 of the Waterford Co-op's 5,000 shareholders.

The vote was 2,741 in favour and 443 against the first of two confirmatory resolutions - a majority of 86 per cent, which easily exceeded the 75 per cent level required for ratification. The second resolution was carried by 2,724 votes to 440, representing an 86.1 per cent majority.

Meanwhile, Avonmore shareholders ratified the merger proposal by 2,624 votes to 30 votes - an overwhelming 98.9 per cent majority - at their meeting in Kilkenny.

The "yes" votes at both meetings exceeded by about three per cent the majorities approving the merger at the first series of special general meetings held on July 11th.

In a joint statement, the Avonmore chairman, Mr John Duggan, and the Waterford chairman, Mr John Dowley, said that their members had made "a momentous decision". It would lead to an Irish, farmer-controlled food company with the scale and resources to successfully compete in a highly competitive international marketplace.

They said the clear majority in favour of the merger had provided the board and management of the new company with a firm mandate to develop the Avonmore Waterford Group took its full potential as a leading and innovative enterprise in the Irish and international food sectors.

Fears that yesterday's confirmatory meeting might attract a lower turnout than the initial poll on July 11th were not realised. The Waterford chief executive, Mr Matt Walsh, said that the overwhelming nature of the vote had clearly come from the grassroots.

The minority group of Waterford members opposing the merger again mounted a last-ditch campaign, handing out leaflets to farmers entering the meeting and using a PA system to broadcast their concerns - including their key reservations about the reduction in farmer control of the new group from 67 per cent to 55 per cent.

As hundreds of farmers applauded the outcome, Mr Dowley told them it had been very decisive, and he urged that all farmers - regardless of their position on the merger - should now unite and contribute to the success of the new entity. He urged those who had voted for the merger not to be too triumphant pointing out that those who had opposed it had genuine concerns. The merger must now be approved by the Minister for Enterprise and Employment, and may be examined also by the Fair Trade Commission. This process may take up to six weeks but is not expected to give rise to any difficulties, the Waterford chief executive, Mr Walsh, said.

The headquarters of the new group will be located in Kilkenny. Its chief executive will be Mr Pat O'Neill, the chief executive of Avonmore, and it will have an Avonmore chairman for the first two years and a Waterford chairman for the following two years.

The Avonmore Waterford Group will control a combined milk pool of 990 million gallons and will control worldwide interests. Milk suppliers to the group will benefit from a price increase of 4.2p per gallon from August 1st, and Waterford shareholders will gain a share 'spin-out' valued at about £35m.

The first Avonmore approach to Waterford was made on April 11th, and after this was rejected, an improved offer, estimated to be worth a total of £340m at the time, was made. With the subsequent improvement in the Waterford share price, the value rose to over £400 million.

A prominent spokesman for Waterford farmers opposing the merger, Mr John Cashman, yesterday congratulated the company's management for getting the result they had set out to get. However, he said, it did not change one iota the reservations held by himself and others about the merger agreement. They would now be endeavouring to ensure that the objectives as set out by the pro-merger people would be honoured in every way.

Mr Dowley, who is retiring on Tuesday as chairman of Waterford plc and co-op, said that yesterday had been an emotional occasion for him. He has been involved with the co-op for over 40 years and has been on the board for 20 years.

"We're going into a new millennium, and this is the sort of entity that will be needed to return farmers a good milk price and guarantee their incomes," he said.