Kerry Group Plc. (KYGA.L), a food company, announced on Tuesday that it has inked a deal with Kerry Co-Operative Creameries Ltd. or Co-Op, to sell its Kerry Dairy Holdings (Ireland) Ltd., for a total expected consideration of 500 million euros.
The proposed transaction would result in a minimal dilution to Kerry's adjusted earnings per share of around 2 percent in the first year post-transaction.
Edmond Scanlon, CEO of Kerry Group, said: "On completion, Kerry will become a pure play global business-to-business taste & nutrition company, with sustainable nutrition at its core, while also supporting our financial objectives of continued market outperformance, strong margin progression, and delivering greater returns for our shareholders."
Kerry Dairy Ireland, which consists of Dairy Consumer Products, is fully owned by Kerry.
Pursuant to the share exchange, the Co-Op members will become direct owners of Kerry shares.
Under the terms, the Co-Op will initially acquire a 70 percent interest in Kerry Dairy Ireland, while Kerry will retain a 30 percent interest. This initial transaction is expected to be completed by the end of January 2025.
The companies have further agreed to certain call-put option arrangements which will transfer the remaining 30 percent in Kerry Dairy Ireland to the Co-Op in the future.
The proposed transaction includes 7 manufacturing sites and over 1,500 staff.
For the full year 2023, Kerry Dairy Ireland had generated revenue of 1.283 billion euros. The profit before tax attributable to its assets at the end of 2023 was 32 million euros.
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