Kerry Group agrees to sell bulk of consumer foods business for €819m 

Kerry Group CEO Edmond Scanlon

Kerry Group has agreed to sell most of its consumer foods business to US food multinational Pilgrim’s Pride for €819m.

The sale solely covers Kerry’s meats and meals business in Ireland and the UK, and includes well-known brands such as Galtee, Denny, Richmond, Fridge Raiders, and Rollover. 

The meals business predominantly serves the UK market and focuses on ethnic chilled and frozen ready-meals, and home delivery meals under the Oakhouse brand.

Kerry said it will use the proceeds from the sale to fund the continued strategic development of its core taste and nutrition business. 

The deal is subject to regulatory approval and is expected to close in the final quarter of this year.

Kerry said it will retain a smaller consumer foods business, which will now fully incorporate its remaining dairy-related activities and brands such as Cheestrings and Dairygold spreads, and various cheese products.

A strategic review of the dairy business — which began earlier this year — has now been completed, with Kerry saying it will not be sold “at this time”.

Just two months ago, Kerry Group suspended transaction talks regarding the dairy business with its largest shareholder Kerry Co-op.

The original plan had been for the co-op to own 60% of the dairy-related arm — which also includes agri-business stores and a dairy processing business — in a joint-venture with Kerry Group, ahead of taking full ownership after five years. However, that deal ultimately came to nothing.

Speaking about the agreed sale of the meats and meals business, Kerry Group chief executive Edmond Scanlon said it further progresses Kerry’s transformation into an ingredients and nutrition company.

“This transaction further enhances Kerry’s focus as a leading business to business ingredient solutions provider for the food, beverage and pharmaceutical markets,” he said.

“Kerry’s strategy for the past 30 years has been to continuously evolve our portfolio, as we progressed on our journey to becoming a market-leading taste and nutrition company,” he said.

The meats and meals business generated pre-tax profits of €63m last year and revenues of €828m.

The current management team of the meats and meals business will transfer to Pilgrim’s upon completion of the deal.

Initial speculation around a sale of Kerry’s consumer foods business sparked a jump in its share price last December. Kerry’s stock is down by over 4% in the last 12 months.

Any disposal of the business has long since been viewed as an obvious way of raising fresh funds for Kerry to expand its main ingredients business through acquisitions.

Late last year, Kerry said it had a strong pipeline of potential takeover targets.