Kerry Co-op members voted on Monday in favour of a plan to acquire control of Dublin-listed Kerry Group’s dairy processing division in a two-staged deal worth €500 million.
The co-op, which currently owns about 11 per cent of Kerry Group, will sell 15 per cent of its holding to part finance the initial stage of the deal, that would see it take a 70 per cent stake in Kerry Dairy Ireland. The deal will also see the co-op distribute the remainder of its holding in Kerry Group, worth €1.4 billion, among its own members.
Some 82 per cent of eligible members – holders of so-called class A and B shares – voted in favour of the transaction at a special general meeting in Killarney, Co Kerry, the co-op said in a statement. Kerry Group will hold an extraordinary general meeting on Thursday on the matter.
Current and former co-op members already own about 20 per cent of the public company’s stock directly and this will increase their combined direct holdings to about 30 per cent, according to Kerry Group.
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The co-op will have an option to acquire the remaining stake in the joint venture for €150 million by July 2030.
“I am very pleased that the A&B shareholders of Kerry Co-op have today voted in favour of the proposal,” said Kerry Co-op chairman James Tangney. “Today’s acceptance commences a journey that will ultimately lead to the full ownership of Kerry Dairy Ireland, one of the leading dairy businesses in the country.”
The initial 70 per cent stake purchase, for €350 million, will be partly funded by Kerry Group buying back €251 million of its shares from the co-op. The listed company will lend the co-op a further €43 million to fund the deal, while the remaining €56 million will come from third-party debt.
Kerry Group will be entitled to a fixed dividend of €7.5 million per annum during the period of the joint ownership.
Kerry Group, which floated on the stock market in 1986 and is currently led by chief executive Edmond Scanlon, has long left its dairy co-op roots behind to become a global taste and nutrition giant.
The higher-margin taste and nutrition division accounted for 86 per cent of the group’s €8 billion of revenues last year and 96 per cent of its €1.2 billion earnings before interest, tax, depreciation and amortisation (Ebitda).
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