The Irish dairy cooperative Kerry is buying itself out from its parent company Kerry Group. The cooperative will pay the publicly listed Kerry Group a total of €500 million through a complex transaction. After that, cooperative Kerry can determine its own course. That is, if the shareholders of the company and the members of the cooperative agree next month.
The separation of the cooperative is a similar move to what happened a few years ago at Glanbia. There, the Irish dairy company also detached itself from the sprawling conglomerate and returned to its roots as a cooperative. Cooperative Glanbia is now called Tirlan and collaborates with A-ware, among others.
Cooperative Kerry has over 2,600 active members with a milk pool of about 1.1 billion kilograms, three factories in Ireland, and some activities in the United Kingdom. This makes Kerry the third largest Irish dairy processor in terms of size, after Tirlan and Lakeland Dairies.
In 2021, a previous separation of cooperative Kerry failed due to the high price that Kerry Group wanted to receive at that time. Initially, €1 billion was requested, later reportedly dropping to €600 million, but the deal did not go through. Now the cooperative must pay €500 million, but in the meantime, the cooperative has also suffered damage. Members have left, and a few months ago, a whole group of about three hundred members, united in the Munster Dairy Producers Organisation, reportedly took about 200 million liters of milk with them.
The buyout amount of €500 million will be paid in two steps. By January 1, 2025, 70% of the stake must transfer to cooperative Kerry, and by 2035, the remaining 30% stake must be taken over.
