Kerry Co-operative Creameries has announced it has reached an agreement with Kerry Group to purchase its Consumer Foods Products and Dairy Ingredients business, Kerry Dairy Ireland, in a deal valued at up to €500 million. The acquisition will be completed in two stages, with 70% of the business being purchased by the end of January 2025, and the remaining 30% expected to be bought by 2035.
Kerry Dairy Ireland, a significant division within Kerry Group, is responsible for processing over 1.1 billion liters of milk annually from approximately 2,740 family farms across Munster. The business, which employs over 1,500 staff, generated €1.3 billion in sales in 2023. It operates six dairy manufacturing facilities in Ireland and the UK and has a strong portfolio of well-known dairy brands such as Cheestrings, Dairygold, EasiSingles, LowLow, Kerrymaid, and Charleville. In addition, it runs a network of 31 agri-services stores and a feed mill in Farranfore.
The deal, which has been approved by the boards of both companies, comes after extensive talks and considers factors such as historical performance, market outlook, and long-term strategic benefits for Kerry Co-op. The Co-op will pay €350 million for the initial 70% stake, based on an enterprise value of €500 million. The Co-op will also have the option to acquire the remaining 30% at any point between the completion of the first purchase and 2030.
Kerry Group, in a statement, said the proposed transaction would allow it to focus more effectively on its global taste and nutrition business, following its strategic shift towards health, food protection, and enzyme platforms. The deal is part of Kerry Group’s ongoing efforts to simplify its business structure and strengthen its core operations.
Kerry Group’s CEO, Edmond Scanlon, described the agreement as a major milestone in the company’s evolution, noting it will allow Kerry to become a pure play global business-to-business taste and nutrition company. He emphasized the strategic alignment of both Kerry Co-op and Kerry Group in their respective areas of expertise.
James Tangney, Chairman of Kerry Co-op, expressed his satisfaction with the deal, stating it would provide farmers with greater control over dairy processing assets while securing the future of dairy farming in the region. The transaction is expected to be transformational for the Co-op, with the possibility of strengthening its position in the dairy industry.
To facilitate the acquisition, Kerry Co-op is proposing a share exchange whereby members will receive Kerry Group shares in exchange for 85% of their Co-op holdings. An extraordinary general meeting (EGM) for Kerry Group shareholders will take place on December 19, and Kerry Co-op members will vote on the deal at a Special General Meeting on December 16.
The deal, which will return dairy processing assets to farmer control, is one of the most significant transactions in Ireland’s agri-food sector in recent years. Financial advisory services for the deal were provided by EY Ireland, while McCann FitzGerald acted as legal advisers to Kerry Co-op. Following the announcement, Kerry Group shares saw a rise in Dublin trading.