Kerry Group plc has today announced its intention to sell Kerry Dairy Ireland to Kerry Co-Operative Creameries Limited for an expected total of €500 million.
The proposed sale will see the co-op acquire a 70% interest in the dairy business, while the group will retain a 30% interest.
Both companies have also agreed to a ‘Phase 2 Transaction’, in which the co-op will have the right to purchase the remaining 30% interest in Kerry Dairy Ireland in exchange for €150 million in cash, as long as the deal is closed no later than 31 December 2035.
In the event that the co-op does not use this option before 31 July 2030, the group will have the right at any time between 31 July 2030 and 31 July 2035 to require the co-op to buy the dairy group for the same amount.
The companies agreed to a €350 million consideration, with the co-op to take a 70% interest in the business, based on a total enterprise value of €500 million.
As a current business division of Kerry Group, Kerry Dairy Ireland is a dairy and ingredients business and processes over 1.1 billion litres of milk annually, from 2,740 family farms across Munster.
The dairy group also employs over 1,500 staff members and exports to over 58 countries worldwide. The business had sales of €1.3 billion in 2023.
According to RTÉ, Kerry Dairy Ireland has six dairy-manufacturing facilities across Ireland and the UK, and the business has a strong portfolio of food brands.
Brands produced under the label include Cheestrings, Dairygold, EasiSingles, LowLow, Kerrymaid and Charleville.
Kerry Group noted that the proposed deal represents an important step in its evolution to becoming a fully dedicated global taste and nutrition solutions company.
‘Global Business’
Speaking 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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