Kerry Group linked to possible new take-over
Wednesday February 03 2010
KERRY Group is believed to be considering the take-over of Newmarket Co-op in County Cork.
Media reports suggest that Kerry Group have made initial overtures to Newmarket Co-op with a view to either a complete take-over or increased co-operation. The discussions between Kerry and Newmarket are said to be at a very early stage.
It's understood that no formal proposals are on the table and nothing has been mentioned about valuations. Sources quoted in the national press this week stressed that the overtures between Kerry and Newmarket were at a very early stage, with both companies exploring various options with a view to developing a closer working relationship.
Any final decision on a linkup would rest with the 700 plus Newmarket shareholders who would have to vote on any proposal that might be developed.
Both Kerry Group and Newmarket Co-op declined to comment on the speculation this week. However, a spokesman for the food giant did confirm that Kerry has a very close working relationship with the Co Cork society.
Kerry Group Director of Corporate Affairs Frank Hayes said the reports were nothing more than "speculation."
Newmarket Co-op already manufacture cheese for Kerry Group and, given their close working relations, talks of a possible link-up are not surprising.
Last year Newmarket. which has eight million gallons of milk quota and 150 active suppliers completed a €16.8m expansion of its cheese plant, which saw its capacity increase by 50 per cent to 35,000 tonnes of cheese per annum.
The Kerry Group's last 'dairy' acquisition was Golden Vale plc in 2001. If a deal with Newmarket Co-op were to go ahead it would give Kerry a cheddar cheese manufacturing facility aimed at the British market.
The possibility of a Kerry bid for the co-op, which recorded sales of €87.6m in 2008, came as moves to rationalise the overall Irish dairy processing sector intensified.
Dairy society chairmen and chief executives held the latest in a series of meetings in Abbeyleix, County Laois on Tuesday hosted by the Irish Co-operative Organisation Society (ICOS), the co-ops national umbrella body.
- SIMON BROUDER sbrouder@kerryman.ie
