Dairy divestment: Kerry Group to become dedicated taste and nutrition company

Kerry Group reveals it will concentrate solely on its taste and nutrition business and sell its Kerry Dairy Holdings to Kerry Co-Operative Creameries for approximately €500 million (US$532 million). The decision marks a significant shift as Kerry moves to strengthen its position in the taste and nutrition sectors.

The news comes on the heels of the Kerry Health and Nutrition Institute’s (KHNI) publication of ten health and nutrition trends for 2025.

“The proposed transaction represents a significant step in Kerry’s 50-year journey,” says Edmond Scanlon, CEO of Kerry Group. “The proposed transaction will result in a global leader in taste & nutrition solutions and an end-to-end industry leader in dairy.”

“On completion, Kerry will become a pure-play global business-to-business taste and nutrition company, with sustainable nutrition at its core, while also supporting our financial objectives of continued market outperformance, strong margin progression and delivering greater returns for our shareholders.”

The sale of Kerry Dairy Ireland will include the company’s Dairy Consumer Products and Dairy Ingredients divisions — segments well-known for their extensive range of dairy products and ingredients across the UK and Ireland. The transaction will see the Co-Op initially taking a 70% stake in Kerry Dairy Ireland, with plans to acquire the remaining 30% in the coming years through put-call options.

Focus on taste and nutrition

Ahead of its strategic reorientation toward becoming a wholly taste and nutrition company, KHNI unveiled its latest report, which forecasts emerging and key trends set to shape the food, beverage and supplement industries in 2025.

These include sustainable, accessible and personalized nutrition, as well as advancements in healthy aging, longevity, biotechnology and the future of food and food production. Moreover, it notes that sustainable nutrition shapes all trends by blending health and environmental care in product creation.

“This report shows us that areas like healthy aging, reducing sodium and understanding the microbiome are all areas where science is evolving,” says Dr. Aoife Marie Murphy, sustainable nutrition senior manager at Kerry. “These trends can inform new product innovation, delivering the health benefits that consumers are looking for, while also considering taste, affordability and sustainability.”

A historic deal

Kerry states that the restructuring will streamline its operations and allow the company to focus on boosting its core taste and nutrition businesses. The deal values Kerry Dairy Ireland according to its enterprise value and its EBITDA contributions to the group.Kerry group divests its dairy interest to focus wholly on its taste and nutrition business.

The financial arrangement includes share redemptions and cash payments, and Kerry anticipates that the share reduction will significantly improve its financial metrics.

At the same time, Kerry Dairy Ireland is poised to grow under Kerry Co-Operative Creameries and to benefit from closer ties to the Irish dairy farming community following the transaction. The company notes that this could lead to more integrated and scalable operations and promote long-term growth and innovation in the dairy sector.

“We are very pleased to have reached an agreement that will ultimately deliver full ownership of one of the leading dairy businesses in the country, while also, in effect, releasing 85% of Kerry Co-Op’s Kerry Group shares into the hands of our members to be retained or sold by each of them at a time of their choosing,” James Tangney, chairman of Kerry Co-Op, emphasizes.

Phase 1 of the transaction, which involves no public share offering, is set to finalize by January 2025. Upon completion, Kerry will account for its 30% stake in Kerry Dairy Ireland as an investment, no longer consolidating it in its financial statements. Phase 2 is expected to be completed prior to July 31, 2035. The Co-Op can buy the remaining 30% of Kerry Dairy Ireland for €150 million (US$159.2 million) by December 2035.

If unexercised by 2030, Kerry can enforce the sale, making the Co-Op the sole owner.

Nutrition Insight will continue to cover this developing story.