Kerry Group to Sell Kerry Dairy Ireland to Kerry Co-op for €500M

Kerry Group to Sell Kerry Dairy Ireland to Kerry Co-op for €500M

November 12, 2024 Catherine Williams - Chief Editor Business

Kerry Group Sells Kerry Dairy Ireland to Kerry Co-Operative Creameries for €500m

Kerry Group has agreed to sell its dairy division, known as Kerry Dairy Ireland, to Kerry Co-operative Creameries. The deal is worth €500 million and marks a significant step in Kerry Group’s transformation into a pure play global ingredients company.

Key Details of the Sale

  • Business Scope: Kerry Dairy Ireland encompasses brands like Cheestrings, Dairygold, Golden Cow, Kerrymaid, and Low Low. It also includes the Dairy Ingredients business, which produces functional dairy proteins and cheese systems[2][3][4].

  • Deal Structure: The Co-op will initially acquire 70% of Kerry Dairy Ireland before the end of January 2025, with the option to purchase the remaining 30% by 2035[2][3][4].

  • Financial Performance: In 2023, Kerry Dairy Ireland generated €1.283 billion in revenues and €53.4 million in EBITDA[2][3][4].

  • Workforce and Operations: The business employs over 1,500 staff and processes 1.1 billion litres of milk annually from 2,740 family farms. It operates six dairy manufacturing facilities across Ireland and the UK, as well as a portfolio of agri-services stores and a feed mill[3][4].

Implications for Both Companies

  • Kerry Group: The sale aligns with Kerry Group’s strategy to focus on its core taste and nutrition business. This move is expected to enhance revenue growth, EBITDA margins, and sustainability profiles, positioning the company for continued market outperformance and strong shareholder returns[2][3][4].

  • Kerry Co-operative Creameries: The acquisition will give the Co-op ownership and control over regional milk processing assets, ensuring the future of dairy farming families. It also secures valuable consumer brands critical to the dairy industry[3][4].

Quotes from Executives

  • Edmond Scanlon, Kerry Group CEO: “The proposed transaction represents a significant step in Kerry’s 50-year journey. Both businesses are perfectly positioned for success, thanks to the dedication and extraordinary contribution of our people over the years.”[3][4]

  • Kerry Co-op Chairman James Tangney: “Kerry Co-op will focus on ensuring Kerry Dairy Ireland becomes a platform for future growth.”[2]

This deal underscores Kerry Group’s strategic shift towards becoming a global business-to-business taste and nutrition solutions company while ensuring the future of dairy farming and processing in the region.