From a Kerry Group perspective, the obvious benefit of this proposed joint venture deal is that it will allow it to realise a significant cash windfall from its primary dairy processing assets to give it additional firepower for new acquisitions in the high-margin, fast-growth area of taste and nutrition.
Just over a year ago, Kerry Group came within inches of pulling off the biggest deal in its history when it narrowly lost out on acquiring the nutrition division of US multinational DuPont.
Speaking to the
Irish Farmers Journal this week, equity analyst at Goodbody stockbrokers Jason Molins said there are limited “transformational” deals available to Kerry Group right now that are similar in size to the DuPont merger.
The emergence of a potential rival to buy Kerry Group’s primary dairy business out from under farmers is tipping Kerry Co-op’s board in favour of doing the €800m deal themselves, the Irish Independent has learned.