Kerry Group shares jump on talk of sale of consumer foods division

A sale of the division would help raise funds for Kerry to expand its main food ingredients business through acquisitions.

Kerry CEO Edmond Scanlon

Kerry Group shares jumped by well over 3% on the back of speculation that the Tralee-based food ingredients giant may be sizing up a sale of its consumer foods division.

Kerry is understood to be considering strategic options for its consumer food business in a move that could free up money for acquisitions.

The group is said to be reviewing its ownership of Kerry Foods, which sells chilled meat and dairy products including Charleville cheese, Cheestrings, Dairygold spread, and Richmond sausages.

It could pursue a sale or spin-off of part or all of the business next year, if it decides to proceed.

The non-dairy consumer food assets are seen as easier to divest and could attract interest from private equity firms. 

Any deal involving the dairy business would likely require negotiations with Kerry Co-Operative Creameries, the farming collective that is Kerry Group’s largest shareholder. 

Its consumer foods business as a whole may be valued in the billions of euros.

“Investors have long questioned Kerry’s strategic rationale for owning the business, which has limited synergies with and structurally slower growth prospects than its core Taste & Nutrition unit,” said Barclays analyst Alex Sloane.

A disposal would help raise funds for Kerry to expand its main food ingredients business through acquisitions. It has a “strong” pipeline of potential takeover targets, CEO Edmond Scanlon said last month.

Additional reporting Bloomberg