Kerry Group placing sole focus on taste and nutrition
Kerry Group has announced that it has entered into an agreement with Kerry Co-Operative Creameries to sell Kerry Dairy Holdings (Ireland) to the Co-Op to become a fully dedicated global taste and nutrition solutions company.
The disposal is expected to raise €500 million. Kerry Dairy Ireland is fully owned by Kerry.
The move follows the significant portfolio development over recent years including the build out of its proactive health, food protection and preservation, and enzymes platforms, while also divesting of the Consumer Foods Meats & Meals business and the Sweet Ingredients portfolio.
Kerry believes the proposed transaction will result in greater portfolio clarity, a more simplified business structure, and increased capital deployment focus across Kerry’s core taste and nutrition business, while further strengthening Kerry’s ability to execute against its strategic priorities.
The proposed transaction will have a positive impact on Kerry’s overall financials, with enhanced revenue volume growth, combined with Kerry’s margins and improved sustainability profile.
Kerry Dairy Ireland consists of Dairy Consumer Products, with its leading range of well-loved brands across cheese, cheese snacks, dairy snacks and dairy spreads. It also comprises the dairy ingredients business, which is a leading provider of Irish dairy ingredients including functional dairy proteins, nutritional dairy bases and cheese systems, along with the provision of related agribusiness products and services.
The proposed transaction builds on the successful partnership between Kerry and the Co-Op, which first began in 1974 and will evolve to a new ownership model for Kerry Dairy Ireland. The structure of the Proposed Transaction with Kerry continuing to have 30% ownership into the future will support continuity and alignment with Kerry Dairy Ireland, the Co-Op’s members and other stakeholders.
Kerry said that the proposed transaction also brings consumer products and value-add dairy ingredient activities closer to the dairy farmers and broader dairy ecosystem, creating a vertically integrated Irish Dairy player of scale, which will be one of the largest dairy processors in the country.
To ensure continuity in Kerry Dairy Ireland’s operations and facilitate an orderly ownership transition, Kerry, the Co-Op and Kerry Dairy Ireland have agreed that certain transitional services will be provided by Kerry to Kerry Dairy Ireland comprising IT services, group shared services, purchasing services and corporate services. Certain IP licencing arrangements will also be entered into such that the Kerry Dairy Ireland Business can continue to avail of certain IP it requires which is owned by Kerry.
Edmond Scanlon, chief executive officer of Kerry Group, commented: “The proposed transaction will result in a global leader in taste & 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.”
