Kerry realises $100m on sale of DCA to Pilsbury

Kerry Group has realised $100 million (€101.7 million) on selling its DCA bakery business in the US and Canada to Pilsbury, a subsidiary of Diageo.

The assets sold include five plants in the US and Canada and had sales of $102 million in the year to the end of last December.

The business being sold manufactures bakery mixes, fillings, icings and glazes for the bakery sector and was bought as part of Kerry's $400 million acquisition of DCA five years ago.

A spokesman for Kerry said the group received an approach from Pilsbury, the biggest manufacturer of bakery products in North America. "We received an approach, we got a good price and it was in the interests of shareholders to sell.

"Pilsbury has sales in the bakery sector of over $1.3 billion compared to our $102 million. As we aim to take lead positions in all our markets it seemed logical to sell at a good price when we got the approach from Pilsbury. We were never going to get into the number one position in the bakery market in the US and Canada," he said.

Kerry has extensive bakery interests in Europe as a result of the Dalgety acquisition last year, and also Central and South America and the Far East, and these remain strong with leading market positions, the Kerry spokesman said.

The $100 million from the sale of the DCA bakery business more than covers the cost of Kerry's most recent buy, the $80 million acquisition of the Swiss-owned Shade Foods and Speciality Food Ingredients. These two companies have three plants in the US and a fourth in the Netherlands.

Kerry chief executive Mr Denis Brosnan is due to report full-year results in mid-March and these are expected to show pre-tax profits in the order of €155-€160 million. Kerry shares were five cents easier yesterday on €11.95.