Kerry Co-Op shareholders have voted in favour of buying back the dairy processing assets of the Kerry Group, following a vote earlier today.
Munster farmers who are shareholders of Kerry Co-Op voted on a deal to buy back the processing assets of Kerry Group for €500 million, RTÉ reported.
Kerry Group welcomed the result, and added that shareholders will vote on the proposed transaction at an extraordinary general meeting taking place on Thursday.
The news comes after the group announced its plans to sell Kerry Dairy Limited to Kerry Co-Operative Creameries Limited last month.
According to the report, the deal for Kerry Group’s consumer food and dairy ingredient business – Kerry Dairy Ireland – is multifaceted.
In addition to the buy-back, it also offers the just under 12,000 farmers and other shareholders in Kerry Co-Op a way to turn €1.4 billion in co-op shares into cash.
Therefore, the deal will potentially deliver a huge financial injection into the Kerry economy and the economy of the wider Munster region.
The injection could begin as early as the end of January, and shareholders will exchange Kerry Co-Op shares for Kerry Group shares.
This will allow farmers and shareholders to trade on the stock market and to cash in their holdings at any time that they choose.
Up until now, they were reliant on an unofficial market to trade co-op shares, or on redemption schemes to run twice yearly.
The vote took place in Killarney, consisting of in-person votes only, with no allowance for postal or proxy votes.
'Transformational'
Of the 5,577 shareholders who were eligible to vote, 2,372 cast their ballot, with 82.42% voting in favour of the deal.
The decision required two-thirds plus one votes in favour for the motion to be passed.
Speaking following the result, Kerry Co-Op chairman James Tangney said in a statement, “I am very pleased that the A&B shareholders of Kerry Co-Op have today voted in favour of the proposal.
“Today's acceptance commences a journey that will ultimately lead to the full ownership of Kerry Dairy Ireland, one of the leading dairy businesses in the country, while it also releases approximately 85% of Kerry Co-Op's Kerry Group shares into the hands of our members to be retained or sold by each of them at a time of their choosing.
“The transaction is transformational for Kerry Co-Op and satisfies the diverse aspirations of the vast majority of our members.
“Working in partnership with Kerry Group, the focus of the Kerry Dairy Ireland Board will be to transition the business to that of a co-op ethos and build further on the strong commercial platform in place to deliver sustainable returns in the months and years ahead for all our members.
“We look forward to working with Pat Murphy, CEO of Kerry Dairy Ireland, and his accomplished leadership team to make this a reality.”
Kerry Group And Co-Op
Kerry Group and Kerry Co-Op have existed in tandem for years, with the co-op providing the initial investment, as the group became a massive wealth-generating vehicle.
Speaking last month about the proposed deal, the chief executive officer of Kerry Group, Edmond Scanlon, said, “The proposed transaction represents a significant step in Kerry’s 50-year journey.
“Our strategy of continuous business development and portfolio evolution, aligned to our customers, has been a key underpin 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 contribution of our people over the years.
“On completion, Kerry will become a pure-play global business-to-business taste-and-nutrition company, with sustainable nutrition at its core, while also supporting our financial objectives of continued market outperformance, strong margin progression, and delivering greater returns for our shareholders.”
James Tangney, the chairman of Kerry Co-Op, added, “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, while also, in effect, releasing approximately 85% of Kerry Co-Op’s Kerry Group shares into the hands of our members, to be retained or sold by each of them at a time of their choosing.
“Kerry Co-Op and Kerry Group have a shared heritage that has helped create value, pioneer change, and shape the dairy industry.
“As direct shareholders in the plc, members will continue to gain from the group’s progress and, in tandem, the co-op will focus on ensuring Kerry Dairy Ireland becomes a platform for future growth.”
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