The potential acquisition of Cargill’s flavours business would see Kerry increase its presence in developing markets such as Asia and South America, and could help the Irish ingredients group to expand its presence in the beverage market.
Frank Hayes, director of corporate affairs, Kerry Group, told FoodNavigator that while he could not disclose any details of the discussions, he is confident that a deal can be reached.
“The acquisition of Cargill Flavor Systems would again 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,” said Stan McCarthy, chief executive, Kerry Group.
Cargill’s flavour division, one of the world’s top flavour businesses, holds contracts with many of the world’s food and beverage companies. The 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.
The acquisition would boost Kerry’s presence in the beverage sector while Cargill’s broad geographic base could offer Kerry increased global reach and growth potential in new and emerging markets.
Although there has been no official confirmation on the details of discussions, market sources have estimated that the deal, if successful, could be finalised as early as September, with a potential price thought to be around the €200m mark.
Both companies are now in a full consultation process with employee representative bodies, which should take in the region of four to six weeks. After the completion of the negotiations, Hayes said he believed the two companies could reach an agreement for the acquisition.
Kerry said that the potential takeover of the Cargill division is part of its wider growth strategy that has already seen it purchase small to medium-sized flavours and food ingredients companies over the last decade.
Hayes did not rule out the possibility of further acquisition activity this year, adding that Kerry is looking to grow their businesses “both organically, and through acquisitions.”
“Our strong balance sheet means we are in a strong position to look at any acquisition possibilities,” he said.