The deal, worth around 170M euro (US$230M), gives the Irish ingredients & flavours firm control of the former Cargill business arm, with estimated revenues of nearly 150m euro ($200M) per year.
The acquisition, completed on December 1st, will see Kerry increase its presence in developing markets such as Asia and South America, and could help the ingredients group to expand its presence in the beverage market.
The two firms had announced in July that they were holding exclusive discussions and a definitive sales agreement was signed on September 22. The deal was completed this week following clearance from the competition authorities.
Kerry Group chief executive Stan McCarthy said the acquisition of Cargill Flavour Systems will “advance Kerry’s capability to provide unrivalled innovative integrated customer solutions across all food and beverage end-use-markets and extend the Group’s market spread in emerging markets.”
The Flavour Systems business – one of the world’s top flavour businesses – holds contracts with many of the world’s food and beverage companies.
The former Cargill division provides ingredients and flavours for the beverage, dairy, sweet and savoury categories including cheese, yoghurts and ice creams and is said to span 22 countries, with production facilities in Europe, North America and Asia.
As such, the completion of the acquisition will boost Kerry’s presence in the beverage sector, while Cargill’s broad geographic base could help Kerry increase global reach and growth potential in new and emerging markets.
The flavours business also employs 700 people in centres in Europe, South Africa, India, Malaysia, China, the USA, and South America. All staff will now join Kerry’s international workforce.
Earlier this year Kerry confirmed that the takeover of the Cargill division will form part of a wider growth strategy that has already seen the Irish firm purchase other small to medium-sized flavours and food ingredients companies in the last decade.
Speaking with FoodNavigator previously, Frank Hayes, director of corporate affairs at Kerry Group, did not rule out the possibility of further acquisition activity this year – explaining that Kerry is looking to grow its businesses “both organically, and through acquisitions.”
“Our strong balance sheet means we are in a strong position to look at any acquisition possibilities,” he affirmed.