Kerry Group could spend up to €850 million (£669.4 million) on a consumer foods acquisition or up to €1.4 billion on a food ingredients acquisition without raising cash through a share issue, ABN Amro has stated in a new report on the foods group.

ABN Amro's recently appointed analyst covering Kerry, Ms Rebecca Wood, says, however, that larger acquisitions are likely to be funded through a combination of debt and equity, with hybrid financing of this scale giving Kerry the firepower for an acquisition costing as much as €2.5 billion.

Kerry Co-op owns 37 per cent of Kerry Foods and this stake can fall to a minimum of 20 per cent, allowing Kerry Group to raise up to €1.6 billion in equity.

Ms Wood adds that even using conservative assumptions, a major acquisition would probably be earnings-enhancing for Kerry.

"Not only would the synergies provide earnings per share accretion, but, with an increased sales base and an enlarged global presence, this could convey potential market share gain opportunities," she adds. Reiterating ABN's "buy" recommendation on Kerry, the analyst has set a target price of €12.90 for the shares, compared to the current market level of €11.64.