Ireland’s Kerry Co-operative Creameries is reportedly set to buy a majority stake in Kerry Group‘s primary dairy business.
The Irish Independent newspaper reported today (19 January) the co-op’s board has agreed to purchase the business, which it said is valued at EUR800m (US$970.7m), in light of the emergence of an unnamed rival bidder.
The newspaper, which did not reveal its source, said the board decided in principle to move ahead with a deal yesterday and is expected to ratify a decision to purchase a 60% majority share in the dairy business at a meeting tomorrow (20 January).
The move was first mooted back in August by the Irish Farmers Journal publication.
When approached by just-food, a Kerry Group spokesperson said: “Kerry does not comment on rumour or speculation.”
just-food has also asked Kerry Co-operative Creameries for a response to the story.
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Kerry Group – in which the co-op owns a 12% stake – operates three dairy manufacturing facilities in Ireland, where more than one billion litres, or 20% of the total Irish milk pool, are processed annually. The dairy arm also produces whey and skim milk powder.
Responding to the Irish Independent story, Ryan Tomkins, an analyst with Jefferies, said the benefit to Kerry Group would be the "removal of what are basic dairy processing operations from what is otherwise a faster-growing and higher-margin division".
In December, Kerry Group refused to be drawn on a report claiming the Tralee-based food and ingredients manufacturer was considering the future of its consumer-facing division.
News agency Bloomberg, citing unnamed sources, said Kerry was weighing up what options it has for the unit, which is home to brands including Richmond sausages and Dairygold butter.