Kerry Group plc has announced an agreement to sell Kerry Dairy Holdings (Ireland) Limited to Kerry Co-Operative Creameries Limited for €500 million. Kerry Dairy Ireland, fully owned by Kerry, includes popular dairy brands in cheese, snacks, and spreads sold in the UK and Ireland, as well as a dairy ingredients business.

Under the deal, Co-Op members will own 85% of the Kerry shares, while the remaining 15% will be redeemed, reducing Kerry’s share capital by about 2.9 million shares. The transaction will be executed in two phases: initially, Co-Op will acquire a 70% stake, with an option to buy the remaining 30% later.

In 2023, Kerry Dairy Ireland generated €1,283.4 million in revenue and €53.4 million in EBITDA. The business has assets valued at €446 million. The deal values Kerry Dairy Ireland at an enterprise value of €500 million, or 9.4 times its EBITDA for 2023.

The sale will allow Kerry to focus on its core taste and nutrition business, enhancing its financial profile and sustainability. Kerry will use the proceeds for general corporate purposes and expects to complete the first phase by the end of January 2025.

This move marks a significant step for Kerry Group in becoming a pure-play taste and nutrition company. Meanwhile, Kerry Dairy Ireland will continue to grow under the new ownership structure, benefiting from close ties to the dairy farming community in Ireland.

Edmond Scanlon, Chief Executive Officer of Kerry Group, commented: “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 & 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 & 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, Chairman of Kerry Co-Op commented: “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 c.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”.

Kerry Group to acquire lactase enzymes business for €150 million