Kerry Group shareholders have today (Thursday, December 19) voted in favour of selling the company’s dairy division, Kerry Dairy Ireland, to Kerry Co-op for €500 million.
The company held an Emergency General Meeting (EGM) at the Rose Hotel, Tralee this afternoon where the vote, which received overwhelming support, took place.
This means that the deal has now passed its final hurdle after previously securing approval from Kerry Co-op shareholders and regulators.
The deal will see Kerry Co-op initially take a 70% stake in Kerry Dairy Ireland (€350 million), with Kerry Group retaining a 30% interest.
The remaining portion of Kerry Dairy Ireland will have to be transferred to Kerry Co-op by 2035.
Kerry Group will be entitled to a fixed dividend of €7.5 million per annum during the period of the joint ownership.
Both parties are hoping to have the first phase of the transaction completed by the end of January 2025.
The deal marks a significant milestone with Kerry Group moving to become a pure taste and nutrition business and Kerry Co-op regaining control of dairy processing in the catchment area.
In a statement the directors of Kerry Group said: “It is the end of one chapter, and the beginning of a new one, where both Kerry Group, and Kerry Dairy Ireland, will each be strongly positioned for success into the future, while each business will retain the heritage, and the core values that have made them what they are today.
“To all those who have been part of the Kerry story over many years, we say thank you”.
Kerry Dairy Ireland
Kerry Dairy Ireland processes over 1.1 billion litres of milk annually from 2,740 family farms across Munster.
It has seven production facilities across Ireland and the UK and has a range of well-known consumer brands such as Cheestrings, EasiSingles, LowLow, Dairygold spread and Charleville.
The business, which has a forecasted revenue of €1.3 billion for 2024, employs over 1,500 people and operates 31 agri-services stores across Kerry, Limerick, Clare and north Cork.
All Kerry Dairy Ireland staff, including the current management team lead by chief executive Pat Murphy, will remain in place.
On Monday (December 16), 82% of Kerry Co-op A and B shareholders (milk suppliers and former milk suppliers) voted in favour of the deal.
The vote at a Special General Meeting (SGM) held in the Gleneagle INEC Arena, Killarney, Co. Kerry drew a crowd of 2,392 shareholders, with 1,955 backing the proposal and 417 voting against.
Kerry Co-op currently holds an 11% shareholding in Kerry Group with a value of around €1.7 billion.
On completion of the deal the co-op will cease to be a shareholder in Kerry Group and the company’s issued share capital will reduce by approximately 2.9 million shares.
In order to fund the first phase of the transaction, Kerry Co-op will use a share exchange programme with members being given 85% of their shares directly in the form of Kerry Group shares, worth around €1.4 million in total.
The remaining 15% – worth around €250 million – would be retained by the co-op to invest in the acquisition of Kerry Dairy Ireland.
The final 30% stake in Kerry Dairy Ireland will be funded through a 1c/L contribution from milk suppliers from 2026 (€50 million), third party debt (€80 million) and forecasted accumulated cash within the business (€20 million).
Kerry Group has also agreed to put a €50 million fund in place to resolve the ongoing dispute with suppliers over leading milk price.
This would involve a cumulative payment of 5.4c/L to suppliers for the years from 2015 to 2020 as per their milk supply contract.