Irish food group Greencore has reached an agreement to sell its malt business to AxéréalUnion De Coopératives Agricoles in a deal worth up to EUR116.3m (US$159.5m).

The business comprises three Greencore-owned malting businesses: Pauls Malt in the UK, Minch Malt in Ireland and Belgomalt in Belgium.

In total, the unit operates seven malting plants, which have a combined capacity of 520,000 tonnes and generated 2009 revenues of EUR217.2m and pre-tax operating profit of EUR20.5m.

The sale excludes some of the businesses property assets, including 50 acres of land in County Kildare.

Announcing the deal, which is expected to be completed in March, Greencore said that proceeds from the sale would be used to reduce debt.

“Today's transaction completes Greencore's journey into a focused convenience foods player, with clear leadership positions in the UK market and a growing regional presence in North America,” CEO Patrick Coveney said.

“Having tested the market with several potential purchasers, we believe that the transaction announced today represents an excellent deal for Greencore shareholders, but also one that will provide enhanced opportunities for Greencore Malt's suppliers, customers and employees,” he added.

The sale is dependent on shareholder approval.

In a separate statement released ahead of the group’s AGM today (11 February), Greencore said that it delivered a “good performance” in the face of last year’s challenging consumer environment.

In an interim management statement, Greencore said that it continues to expand in the US and has had a strong start to the current financial year.

The company’s convenience foods grew both sales and operating profit growth year on year, while the ingredients division performed “in line” with expectations.