Kerry Group Shareholders Approve €500 Million Dairy Division Sale to Kerry Co-op
Source: DairyNews.today
Kerry Group shareholders on Thursday overwhelmingly approved the €500 million sale of its dairy division, Kerry Dairy Ireland, to Kerry Co-op. The vote, held at an Emergency General Meeting (EGM) at the Rose Hotel in Tralee, marks the final step in a transaction already cleared by Kerry Co-op shareholders and regulators.
Under the deal, Kerry Co-op will initially acquire a 70% stake in Kerry Dairy Ireland for €350 million, with Kerry Group retaining a 30% interest. The remaining stake will be transferred to Kerry Co-op by 2035. During the joint ownership period, Kerry Group will receive an annual fixed dividend of €7.5 million.
The first phase of the transaction is expected to close by the end of January 2025, signaling a strategic pivot for Kerry Group as it transitions to focus exclusively on its taste and nutrition business, while Kerry Co-op reasserts its role in dairy processing within the region.
Statements from Kerry Group and Leadership
Kerry Group directors described the deal as “the end of one chapter, and the beginning of a new one.” The statement emphasized that both Kerry Group and Kerry Dairy Ireland are positioned for future success while preserving their shared heritage and values.
“To all those who have been part of the Kerry story over many years, we say thank you,” the statement added.
Kerry Dairy Ireland Overview
Kerry Dairy Ireland processes over 1.1 billion litres of milk annually from 2,740 family farms across Munster. The business operates seven production facilities in Ireland and the UK, with a product portfolio that includes household names like Cheestrings, EasiSingles, LowLow, Dairygold, and Charleville.
The division, which employs over 1,500 people, also runs 31 agri-services stores in Kerry, Limerick, Clare, and north Cork. Forecasted revenue for 2024 stands at €1.3 billion. All staff, including CEO Pat Murphy and the existing management team, will remain in place following the transaction.
Key Details of the Agreement
Kerry Co-op Vote: Earlier in the week, 82% of Kerry Co-op shareholders voted in favor of the acquisition at a Special General Meeting (SGM) in Killarney, attended by 2,392 members. The vote results saw 1,955 in support and 417 opposed.
Funding the Acquisition: The initial €350 million phase will be funded through a share exchange programme, with members receiving 85% of their shares directly in Kerry Group stock, valued at approximately €1.4 billion. The remaining 15% of shares, worth around €250 million, will be retained by Kerry Co-op to finance the purchase.
Final 30% Stake: The acquisition of the remaining 30% will be financed through a 1c/L contribution from milk suppliers starting in 2026 (€50 million), third-party debt (€80 million), and accumulated cash reserves (€20 million).
Resolution of Milk Price Dispute
Kerry Group has also committed to a €50 million fund to resolve ongoing disputes with suppliers regarding leading milk price commitments. The fund will cover a cumulative payment of 5.4c/L to suppliers for milk delivered between 2015 and 2020, as per their contracts.
The transaction positions Kerry Group as a pure-play taste and nutrition company, sharpening its focus on global growth in specialized food solutions. For Kerry Co-op, the acquisition marks a return to its roots, taking full control of dairy processing in its catchment area.
The first phase of the transaction is expected to close by the end of January 2025, signaling a strategic pivot for Kerry Group as it transitions to focus exclusively on its taste and nutrition business, while Kerry Co-op reasserts its role in dairy processing within the region.
Statements from Kerry Group and Leadership
Kerry Group directors described the deal as “the end of one chapter, and the beginning of a new one.” The statement emphasized that both Kerry Group and Kerry Dairy Ireland are positioned for future success while preserving their shared heritage and values.
“To all those who have been part of the Kerry story over many years, we say thank you,” the statement added.
Kerry Dairy Ireland Overview
Kerry Dairy Ireland processes over 1.1 billion litres of milk annually from 2,740 family farms across Munster. The business operates seven production facilities in Ireland and the UK, with a product portfolio that includes household names like Cheestrings, EasiSingles, LowLow, Dairygold, and Charleville.
The division, which employs over 1,500 people, also runs 31 agri-services stores in Kerry, Limerick, Clare, and north Cork. Forecasted revenue for 2024 stands at €1.3 billion. All staff, including CEO Pat Murphy and the existing management team, will remain in place following the transaction.
Key Details of the Agreement
Kerry Co-op Vote: Earlier in the week, 82% of Kerry Co-op shareholders voted in favor of the acquisition at a Special General Meeting (SGM) in Killarney, attended by 2,392 members. The vote results saw 1,955 in support and 417 opposed.
Funding the Acquisition: The initial €350 million phase will be funded through a share exchange programme, with members receiving 85% of their shares directly in Kerry Group stock, valued at approximately €1.4 billion. The remaining 15% of shares, worth around €250 million, will be retained by Kerry Co-op to finance the purchase.
Final 30% Stake: The acquisition of the remaining 30% will be financed through a 1c/L contribution from milk suppliers starting in 2026 (€50 million), third-party debt (€80 million), and accumulated cash reserves (€20 million).
Resolution of Milk Price Dispute
Kerry Group has also committed to a €50 million fund to resolve ongoing disputes with suppliers regarding leading milk price commitments. The fund will cover a cumulative payment of 5.4c/L to suppliers for milk delivered between 2015 and 2020, as per their contracts.
The transaction positions Kerry Group as a pure-play taste and nutrition company, sharpening its focus on global growth in specialized food solutions. For Kerry Co-op, the acquisition marks a return to its roots, taking full control of dairy processing in its catchment area.
