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Dairy cooperative Kerry buys itself out of concern
Irish dairy cooperative Kerry is buying itself out of its parent company Kerry Group. The cooperative is paying the listed Kerry Group plc a total of €500 million in a complicated transaction. After that, cooperative Kerry can now determine its own course. That is, if the company's shareholders and the cooperative's members agree next month.
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The split from the cooperative is a similar movement as occurred a few years ago at Glanbia. There, the Irish dairy company also separated from the overgrown concern and went back to basics as a cooperative. Glanbia Cooperative is now called Tirlan and works together with A-ware, among others.
Cooperative Kerry has over 2.600 active members with a milk pool of around 1,1 billion kilos, three factories in Ireland and a few more activities in the United Kingdom. This makes Kerry the third largest Irish dairy processor, after Tirlan and Lakeland Dairies.
In 2021, an earlier split from the Kerry cooperative fell through due to the high price that Kerry Group wanted to collect at the time. Initially, €1 billion was asked, later the asking price reportedly dropped to €600 million, but the deal did not come to fruition. Now the cooperative has to pay €500 million, but in the meantime the cooperative has also suffered losses. Members have left, a few months ago even a whole group of around three hundred members, united in the Munster Dairy Producers Organisation. They reportedly took around 200 million litres of milk with them.
The buyout sum of €500 million will be paid in two steps. Before 1 January 2025, 70% of the interest must be transferred to cooperative Kerry, and the remaining 2035% interest must be acquired by 30 at the latest.