Kerry Group to sell Meats and Meals business to Pilgrim’s Pride in €819M deal
18 Jun 2021 --- Kerry Group has agreed to sell its Consumer Foods’ Meats and Meals business in the UK and Ireland to Pilgrim’s Pride for a cash consideration of €819 million (US$976 million). The transaction is expected to close in the final quarter of this year, subject to customary closing conditions and regulatory approvals.
The deal is expected to further enhance Kerry’s focus as a crucial business-to-business ingredient solutions provider for the food, beverage and pharmaceutical markets.
Speaking to FoodIngredientsFirst, Dawn Spencer, marketing director at Kerry Foods, says she expects the plant-based movement to be a dominant theme in the meats arena in the coming years.
“Overall, the plant based movement has a very positive impact on the meats and meals brands in our portfolio and we expect that to continue.”
The proceeds from the sale will be used for general corporate purposes and the continued strategic development of the Taste & Nutrition business, outlines Kerry.
Following the announcement, Kerry will separate and realign the remaining dairy-related activities within the Consumer Foods Business. The strategic review of the dairy business has been completed, and there will be no disposal of the dairy business at this time.
This transaction further enhances Kerry’s focus as a crucial business-to-business ingredient solutions provider for the F&B markets.Convenient and food-to-go solutions
The Meats and Meals business provides convenience food solutions, with well-known brands and longstanding relationships with major retailers.
The financial results for the year ended 31 December 2020 attributable to the business were revenue of €828 million (US$986 million), EBITDA of €86 million (US$102 million), profit before tax of €63 million (US$75 million), and gross assets of €521 million (US$620 million).
The Meats business manufactures branded and private label meats, meat snacks, food-to-go and meat-free products in the UK and Ireland.
Its brands include Richmond, Denny, Galtee, Fridge Raiders and Rollover.
The Meals business primarily serves the UK market and specializes in authentic international chilled and frozen ready meals, multi-cuisine ready-to-cook ranges and home delivery meals under the Oakhouse brand.
An evolving space
“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 and nutrition company,” says Edmond Scanlon, CEO of Kerry.
He previously told FoodIngredientsFirst that there were “notable distinctions” in business performance across various channels as a knock-on effect of COVID-19.
Since the onset of the COVID-19 pandemic, chilled meals have been impacted by reduced consumer impulse purchases, while frozen meals benefited from increased retailer stocking, Scanlon previously said.
Aligning values
The Meals business primarily serves the UK market and specializes in international chilled and frozen ready meals.
Fabio Sandri, CEO of Pilgrim’s, adds how the company is “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’ management team, 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.”
According to Nick Robinson, CEO of Kerry Consumer Foods, the companies share “a rich heritage in food production with aligned values.”
“We look forward to working with our new colleagues to build upon the progress of these businesses and realize our combined growth opportunities as we enter an exciting new phase.”
Prepared meals and meat trending
In recent months, Kerry has been expanding its offerings in the meat, prepared meals, frozen foods and savory flavors sectors.
In February, Kerry Group posted its business performance for the year ended December 31, 2020, with group revenue of €7.0 billion (US$8.5 billion).
In the same month, Kerry acquired Jining Nature Group, a Chinese manufacturer of savory flavors, seasonings and prepared food products, to expand authentic local and regional taste technologies and add application capabilities to the Kerry portfolio.
By Elizabeth Green
