Kerry Group plc has announced a significant agreement with Kerry Co-Operative Creameries Limited to sell Kerry Dairy Holdings (Ireland) Limited. The total expected consideration for this transaction is €500 million. Kerry Dairy Ireland, fully owned by Kerry Group, comprises Dairy Consumer Products featuring a renowned portfolio of brands across cheese, cheese snacks, dairy snacks, and dairy spreads, all readily available in chilled cabinets throughout the UK and Ireland. Furthermore, it includes the Dairy Ingredients segment, which is a leading source of Irish dairy ingredients, encompassing functional dairy proteins, nutritional dairy bases, and cheese systems, along with related agribusiness products and services.
As part of the proposed transaction, Kerry Co-Op will initially obtain a 70% stake in Kerry Dairy Ireland, while Kerry Group will retain a 30% interest. Both parties have also agreed on specific call-put option arrangements that will facilitate the transfer of the remaining 30% of Kerry Dairy Ireland to the co-op in subsequent years.
This transaction signifies a crucial advancement in Kerry’s evolution towards becoming a dedicated global leader in taste and nutrition solutions. This move follows a comprehensive portfolio transformation in recent years, including the expansion of its proactive health, food protection and preservation, and enzymes platforms. Additionally, the company has divested its Consumer Foods Meats & Meals business and the Sweet Ingredients portfolio. The proposed agreement builds on the successful partnership established between Kerry and the Co-Op in 1974 and introduces a new ownership model for Kerry Dairy Ireland.
Moreover, this deal will align consumer products and value-added dairy ingredient operations more closely with dairy farmers and the broader dairy ecosystem. As a result, it will create a vertically integrated Irish dairy player of considerable scale, positioning it as one of the largest dairy processors in the nation. To ensure a seamless transition and continuity in operations, Kerry Group will provide certain transitional services to Kerry Dairy Ireland, including IT, group shared services, purchasing services, and corporate services.
Edmond Scanlon, Chief Executive Officer of Kerry Group, remarked: “The proposed transaction represents a significant step in Kerry’s 50-year journey. Our strategy of continuous business development and portfolio evolution aligned with our customers has been a key underpinning of Kerry’s success over the years. The proposed transaction will result in a global leader in taste and nutrition solutions and an end-to-end industry leader in dairy. Both businesses are perfectly positioned for success, thanks to the dedication and extraordinary contributions of our people over the years.”
Furthermore, he added: “On completion, Kerry will become a pure play global business-to-business taste and nutrition company, with sustainable nutrition at its core. This also supports our financial objectives of continued market outperformance, strong margin progression, and delivering greater returns for our shareholders.”
James Tangney, Chairman of Kerry Co-Op, stated: “We are very pleased to have reached an agreement that will ultimately deliver full ownership of one of the leading dairy businesses in the country. Additionally, this effectively releases approximately 85% of Kerry Co-Op’s Kerry Group shares into the hands of our members, allowing them to retain or sell their shares at their convenience. Kerry Co-Op and Kerry Group share a rich heritage that has fostered value creation, pioneered change, and shaped the dairy industry.”
He also mentioned: “As direct shareholders in the plc, members will continue to benefit from the Group’s advancements, while the Co-Op will prioritize ensuring that Kerry Dairy Ireland evolves as a platform for future growth.”
