Kerry Group Plc is considering strategic options for its consumer food business, home of the popular Richmond sausages brand, in a move that could free up money for acquisitions, people familiar with the matter said.
The Irish company is reviewing its ownership of Kerry Foods, which sells chilled meat and dairy products, according to the people. It could pursue a sale or spinoff of part or all of the business next year if it decides to proceed, the people said, asking not to be identified because the information is private.
The non-dairy consumer food assets, which include Rollover hot dogs and Naked Glory meat substitutes, are seen as easier to divest and could attract interest from private equity firms, the people said. Kerry Foods also sells Dairygold brand spreads, Charleville cheese and Cheestrings snacks.
Any deal involving the dairy business would likely require negotiations with Kerry Co-Operative Creameries Ltd, an Irish farming coop that is Kerry Group’s largest shareholder. The consumer foods business as a whole may be valued in the billions of euros, the people said.
A disposal would help raise funds for Kerry to expand its main food ingredients business through acquisitions. Kerry, which makes flavours and sweeteners, has a "strong" pipeline of potential takeover targets, chief executive Edmond Scanlon said on a November conference call. It was one of the bidders for DuPont Inc.'s nutrition arm last year before losing out to International Flavors and Fragrances.
Deliberations are at an early stage, and Kerry hasn’t made a final decision on the timing or method of any divestment, the people said. It could still opt to keep the business, according to the people. A representative for the Tralee-based group said the company doesn’t comment on rumours or speculation.
Revenue from Kerry's consumer foods division fell 2 per cent last year to €1.3 billion. It accounted for 18 per cent of the group's sales, according to data compiled by Bloomberg. - Bloomberg
