Kerry has entered into an agreement with Kerry Co-Operative Creameries Limited to sell its dairy business to the co-op, for an expected total of 500 million Euros.
 
Presently, Kerry Dairy Ireland is fully owned by Kerry, and produces a range of cheeses, snacks, dairy spreads, and ingredients such as proteins, bases, cheese systems, and agribusiness products and services.
 
The transaction, if approved, will result in two new businesses, Kerry Group and Kerry Dairy Ireland, each of which will focus on respective strategies. Kerry Group will shift its focus solely to taste and nutrition solutions for foods, beverages, and pharmaceuticals, while Kerry Dairy Ireland will serve as the provider of dairy consumer products and ingredients.
 
Kerry’s has significantly developed its taste and nutrition business in recent years, building out proactive health, food protection and preservation, and enzymes platforms, along with the divesting of the consumer foods, meats, and meals business and sweet ingredients portfolio. The company will simplify its business structure, funding, and resources surrounding taste and nutrition.
 
Meanwhile, the co-op, which first partnered with Kerry in 1974, will evolve to a new ownership model for Kerry Dairy Ireland. Kerry will continue to have a 30% ownership to support continuity and alignment with the co-op’s members and other stakeholders in the early phase of the transaction, and Kerry will lend certain services and IP to the co-op.
 
“The proposed transaction represents a significant step in Kerry’s 50-year journey,” said Edmond Scanlon, CEO of Kerry Group. “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.”
 
“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 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,” said James Tangney, chairman of Kerry Co-Op. “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.”
 
The vote on the proposed transaction for Kerry shareholders will take place on Thursday, Dec. 19.
 
Kerry will sell Kerry Dairy Holdings to the Co-Op for an expected 500 million euros. Co-Op members will become direct owners of Kerry shares equivalent to 85% of the Co-Op’s current shareholding, and 15% of the Co-Op’s shareholding in Kerry will be redeemed as part of the consideration for the disposal.
 
The Co-Op will then cease to be a shareholder in Kerry, and Kerry’s issued share capital will reduce by about 2.9 million shares.
 
The Co-Op will initially acquire a 70% interest in Kerry Dairy Ireland, and Kerry will retain a 30% interest for the early phases of the transaction, before the Co-Op purchases the remaining 30% by the end of 2035.