Kerry Group spends €365m to expand in US and Oman
KERRY Group is back on the acquisitions trail and is to spend €365m to buy the US-based Fleischman’s Vinegar and Omani-owned AATCO Food as the Tralee-based group expands its global footprint further.
The deals see Kerry tap into the US – the world’s richest market – and into the Middle East, after it said it could spend as much on €800m on acquisitions this year.
The AATCO acqusition fits with chief executive Edmond Scanlon’s strategy of building up Kerry’s business in developing markets after it bought two Chinese companies in 2017.
Kerry said in a statement that the deals would “further expand the group’s foundational technology portfolio, as well as strengthening its foodservice and developing markets positioning”.
Fleischmann’s makes speciality vinegars and cooking wines, while AATCO is a foods group that has a big footprint across the Gulf and in Africa.
Mr Scanlon ran Kerry’s business in Asia before he succeeded Stan McCarthy as CEO.
The company spent €500m in 2017 on acquisitions and has stressed its long-term ambitions to build its business footprint, especially in its taste and nutrition division where volumes grew 4.1pc in the first half of this year versus 1.3pc in its consumer foods division, which was once the mainstay of its business.
The company’s stock fell 25 cent to 91.25 yesterday. Kerry’s stock price has almost doubled in the past five years amid an expansion drive as it moves into the higher margin flavourings business from producing lower-value ingredients.
It faces a threat from Brexit, even though the British market is a far smaller part of its business than it was when the group started,
Half of Ireland’s farm exports go to Britain and in the event of “no deal” could face tariffs of up to 60pc under World Trade Organization rules, volatile exchange rate movements and the risk that ports could be paralysed, hitting cargoes.
Kerry’s stock price has almost doubled in the past five years