Kerry Group has agreed to sell its consumer foods meats and meals business to Pilgrim’s Pride for €819m, putting in motion a strategic realignment of the company as a global ingredients business.
he sale, which includes such well-known brands as Richmond, Denny and Galtee, will generate cash for investment and help fulfill a long-term ambition of CEO Edmond Scanlon to turn Kerry Group into a pure taste and nutrition company, unlocking substantial value for shareholders.
“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,” said Mr Scanlon.
“This transaction further enhances Kerry’s focus as a leading business to business ingredient solutions provider for the food, beverage and pharmaceutical markets.”
The meats and meals division generated revenue of €828m, or nearly 12pc, of Kerry’s €7bn in revenue in 2020 – two-thirds of the total for consumer foods, which has been increasingly seen by management and the market as a non-core part of the business.
The sale to Pilgrim’s, which owns the Moy Park chick brand, leaves the rest of consumer foods division – home of Dairygold and Cheestrings – up for grabs amid a bonanza for disposals in the sector this year.
Capvest’s Eight Fifty Food Group ditched its IPO for a trade sale to Canadian food giant Sofina in March for a price believed to be near €2bn, while Valeo Foods was sold to Bain Capital last month for €1.7bn.
Kerry Group put the consumer foods division up for sale at the end of the first quarter when the company initiated a formal sales process to flush out buyers after months of speculation that the business was on the block.
The sale of the division was widely expected to proceed once Kerry sealed an agreement to spin out its dairy business into a joint venture with Kerry Creameries Co-op.
However, that transaction was called off on April 15 over what Kerry Group management regarded as too low an offer for the dairy unit.
The company said it is now folding its dairy business into the rump consumer foods division and will not be selling it at this time.