Kerry Group announced that the first phase of the takeover of its Irish dairy operation by Kerry Co-op was completed on 31 December.

Under the terms of the deal, which was passed by 84% of Kerry Co-op voting shareholders and more than 99% of Kerry Group shareholders earlier in December, 2,858,372 Kerry Group shares held by Kerry Co-op will be used towards funding the initial €350m payment for the dairy processor.

This means that on that day the transfer is worth €188,600 to the average A shareholder in Kerry Co-op; €157,780 to the average B shareholder; and €88,750 to the average C shareholder

The balance of Kerry Co-op’s shareholding in Kerry Group, amounting to 16,187,024 shares, have been returned to shareholders in Kerry Co-op.

The market price of those shares on Tuesday 7 January 2025 was €94 per share, putting the value of the transfer to co-op shareholders at over €1.5bn. This means that on that day the transfer is worth €188,600 to the average A shareholder in Kerry Co-op; €157,780 to the average B shareholder; and €88,750 to the average C shareholder. Any shareholder cashing in their shares would likely be liable to pay capital gains tax, but there is no tax liability from the transfer.

The valuation of the shares used to fund the purchase was not the value on the day the transaction completed which was €93.25 per share, but instead a “volume weighted average price” over a 10-business-day period prior to completion of the transaction.

On Monday 6 January, a spokesperson for Kerry Co-op confirmed that the period used for the calculation was 12 December to 27 December. The volume weighted price over this period was €91.63215. In the Irish Farmers Journal report published online the day the completion of the deal was announced, the price was calculated using the period 13 December to 30 December, which gave a slightly higher average price of €91.79.

Multiplying €91.63215 by the 2,858,372 shares gives a value of €261,918,772, a figure almost €11m higher than the €251m valuation used in presentations to members of Kerry Co-op during information meetings ahead of December’s vote.

Kerry Co-op now holds no shares in group

The balance of the €350m will be funded by bank debt of €56m and a loan from Kerry Group of just over €32m. The higher value of the shares means that the loan from Kerry Group is lower than the €43m indicated in the information meetings.

The two share transfers mean that on the first day of 2025, Kerry Co-op held no shares at all in Kerry Group plc, finally breaking the link between the two organisations which goes back to the founding of Kerry Group in 1986.

Edmond Scanlon, chief executive officer of Kerry Group, said the completion “marks a significant step in Kerry’s history”, adding that he wished the employees of Kerry Dairy Ireland the very best for the future while acknowledging “their contribution to Kerry over the years”.