The Irish consumer foods and ingredients supplier whose major brands include Richmond, Wall's, Cheesestrings and Dairygold, said the proceeds of the sale will be used for “general corporate purposes” and spent on developing Kerry’s Taste & Nutrition business.
Edmond Scanlon, CEO of Kerry Group, said the deal allows the company to focus more on its core ingredients solutions business.
“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 & Nutrition company,” he said.
“This transaction further enhances Kerry’s focus as a leading business to business ingredient solutions provider for the food, beverage and pharmaceutical markets.”
Pilgrim’s Pride CEO Fabio Sandri added: “We are pleased to have the opportunity to position Pilgrim’s as a leading prepared foods and branded products player through this acquisition.
“We look forward to welcoming Kerry Consumer Foods’ Meats and Meals business’ talented management team and other team members, led by Nick Robinson, to the Pilgrim’s family, and we look forward to working together to drive growth and deliver value for all of our stakeholders.”
Kerry’s Taste and Nutrition business offers ‘higher growth opportunity’
The team of research analysts at Ireland’s largest stockbroker Davy Group said the deal marked a ‘strategic milestone’.
“The disposal of the Consumer Foods Meat and Meals business marks an important strategic milestone in the evolution of Kerry Group and accelerates the journey to a pure-play value add Ingredients Solutions provider,” they wrote in a note to investors.
“The disposal demonstrates proactive portfolio management and facilitates the recycling of capital into a higher growth opportunity set within Taste & Nutrition (T&N). Post completion, Kerry will have one of the strongest balance sheets in the sector, with estimated financial firepower of at least €3bn, complementing a healthy investment pipeline. The transaction is expected to close in Q4 2021, subject to regulatory clearance.”
The Meat and Meals side of Kerry Group’s business manufactures meat snacks, food-to-go and meat-free products. The deal confirms rumours that Kerry is intent on freeing its consumer food assets to pursuing the health and wellness and sustainability megatrends. In a note to investors earlier in 2021, the team of Barclays analysts said that Kerry’s ‘increasingly relevant model’ and expertise in food innovation areas supporting health and wellness and sustainability megatrends should underpin Kerry’s Taste & Nutrition unit’s growth targets over the next three years.
“The ongoing pandemic has increased consumer preferences towards immunity enhancement, authentic cooking and plant proteins. This is driving much of Kerry’s innovation pipeline with customers for brands at both retail and foodservice channels,” they wrote.