Kerry Co-op members approve dairy acquisition, share exchange

The approval, achieved with 82% support from eligible members at a Special General Meeting in Killarney, marks a major step towards reshaping the ownership structure of one of Ireland’s leading dairy businesses.

James Tangney, Chairman of Kerry Co-op, described the approval as a “transformational” milestone, emphasizing that it aligns with the diverse interests of the Co-op’s shareholders.

He noted that the acceptance paves the way for full ownership of Kerry Dairy Ireland, a pivotal dairy business in Ireland’s agricultural sector, while simultaneously releasing approximately 85% of Kerry Co-op’s Kerry Group shares into the hands of its members.

Tangney highlighted that the change would provide shareholders with flexibility to either retain or sell their PLC shares at a time of their choosing.

Under the approved plan, Kerry Co-op’s 16.1 million shares in Kerry Group Plc, currently valued at around €1.4 billion, will be redistributed to Co-op members.

While the redistribution will only represent a shift on paper, it grants shareholders, which include active milk producers, former producers, and non-producer shareholders, direct ownership of Kerry Group PLC shares.

The financial arrangement underpinning the acquisition involves Kerry PLC redeeming 2.9 million shares, generating approximately €250 million to fund part of the purchase of a 70% stake in Kerry Dairy Ireland.

The remaining amount, estimated to be €100 million, will be financed through loans provided by Kerry Group and a consortium of banks.

The precise loan value will depend on the share price of Kerry Group PLC at the time of the transaction, as a higher share price would reduce the financing required.

This restructuring represents a strategic opportunity for Kerry’s dairy farmers and shareholders, who will also be given the option to acquire the remaining 30% stake in Kerry Dairy Ireland by 2035 for approximately €150 million.

For Kerry Dairy Ireland, this move signals a stronger commitment to a farmer-led ownership model, offering long-term prospects for investment and growth within the Irish dairy sector.

The proposal’s approval now shifts the focus to Kerry Group shareholders, who are set to vote on the transaction at an extraordinary general meeting scheduled for December 19, 2024.

The outcome of that meeting will determine the final steps of this deal, which has the potential to reshape the dairy landscape and deliver substantial economic benefits to Kerry Co-op members.