Kerry spends €180m on UK food group

Kerry Group, the food maker, is spending almost €180 million to consolidate its British precooked meals business with the purchase of Noon Group, which makes own-brand Asian meals for British supermarket chains.

The £124 million (€179.22 million) deal will be financed on existing lines of credit with the group's banks.

Shares in the group gained 13 cent to close 0.64 per cent higher at €20.60 on the Dublin market yesterday.

Indian businessman Sir Gulam Noon, who established the group in 1989, has agreed to stay on after the acquisition.

Noon Group has already changed hands twice in the last six year.

Sir Gulam sold the business in 1999 to WT Foods, who sold it on in 2001 to members of its own management team and the private equity group Bridgepoint Capital.

With three factories in the Great Western Industrial Estate in south-west London, the group produces a range of "premium quality" Indian, Thai, Oriental and other Asian meals in the precooked market.

Kerry believes the business will complement its Rye Valley Foods operation, a supplier of own-brand frozen ready meals to both the Irish and British foodmarkets.

"The UK chilled ready market, valued at £1.4 billion sterling, continues to exhibit annual growth rates of 5 to 7 per cent per annum," said Kerry chief executive Hugh Friel.

The premium sub-category of the market was achieving high double digit growth in response to demand for increased convenience, he said.

While Goodbody analyst Liam Igoe said the deal was larger than he would have anticipated, he said it was not so large that it would prevent Kerry from making further acquisitions on the ingredients side of the business should the opportunity arise.