The Daily Star Ireland
Kerry Co-op shareholders have approved the acquisition of dairy processing assets from Kerry Group in Killarney, Co Kerry.
Farmers from across Munster convened at the Gleneagle Hotel’s INEC to vote on the transaction, resulting in the co-op purchasing Kerry Group’s dairy processing assets for €500 million. This agreement provides a path for farmers and shareholders to convert €1.4 billion worth of co-op shares into cash.
Additionally, it establishes a €50 million fund by Kerry Group to resolve a longstanding milk price dispute. The deal received 82.42% approval from shareholders.
Kerry Group expressed satisfaction with the vote and announced that shareholders will further vote on the proposal at an extraordinary general meeting on Thursday.
Kerry Co-op Chairman James Tangney expressed his pleasure with the approval, noting that it initiates a journey towards full ownership of Kerry Dairy Ireland. This transition aims to align the business with co-op principles while allowing shareholders to manage their shares as they see fit.
Tangney emphasized that this transformation will benefit all members by enhancing the commercial platform and ensuring sustainable returns.
In total, 2,372 of the 5,577 eligible shareholders voted, with 82.42% in favor. The resolution required a two-thirds majority plus one vote to pass.
Voting was conducted in person, with no option for postal or proxy votes. Buses were provided to transport shareholders from outside the county, including three from Ennis, Co Clare.
The deal encompasses the buyback of Kerry Dairy Ireland’s consumer foods and dairy ingredients business. It offers nearly 12,000 Kerry Co-op shareholders a way to liquidate €1.4 billion worth of co-op shares, potentially injecting significant funds into the Kerry and broader Munster economy by the end of January.
Shares in Kerry Co-op will be exchanged for Kerry Group shares, enabling shareholders to trade on the stock market and access cash at their discretion. Previously, trading was limited to an unofficial grey market or biannual redemption schemes.
Kerry Co-op and Kerry Group have long coexisted, with the co-op providing initial investment and the group generating significant wealth.
Kerry Co-op was founded in January 1973 to process milk from dairy farmers in Kerry. The launch of Kerry Group in 1986 and its subsequent global success story are remarkable.
Today, Kerry Group is a leader in sustainable, science-backed nutrition, operating 135 manufacturing facilities in 36 countries, employing 21,000 people, and exporting to over 150 countries. The company has annual revenues of €8 billion.
The initial investment in Kerry Co-op, just over £1 million, has now yielded significant dividends, with €1.4 billion worth of Kerry Group shares being released.
An additional €250 million in Kerry Group shares held by Kerry Co-op will partly fund the buyback of Kerry Dairy Ireland.
The vote marks a significant milestone in Irish corporate history, particularly impacting the economy of Kerry and Munster.
Kerry Co-op has been the largest shareholder in Kerry Group since its launch, retaining 90% of the business initially. Although its shareholding has since reduced to 11%, worth around €1.7 billion, the relationship between the two entities remains strong.
Kerry Co-op’s 11,906 shareholders are divided into three categories: A shareholders actively supply milk to Kerry Group, B shareholders have ceased supplying milk, and C shareholders typically acquired shares through inheritance or purchase. Only the 5,577 A and B shareholders were eligible to vote.
The proposed deal has generated significant interest since its announcement, particularly regarding the €500 million price for Kerry Dairy Ireland’s dairy processing assets. Over a dozen shareholder and information meetings have taken place in counties Kerry, Clare, Limerick, and Cork.
Support and opposition to the deal have been evident, with financial details discussed extensively. The deal is crucial not only to rural areas but also to towns like Tralee, Killarney, Charleville, Adare, and Ennis, whose economies are closely tied to their agricultural surroundings.
While supporters claim numerical strength, opponents only need one-third of the votes to block the deal due to the two-thirds majority requirement.
