NAAS, IRELAND — Kerry Group PLC announced Nov. 12 it reached an agreement to sell its dairy business, Kerry Dairy Holdings Ltd., to Kerry Co-Operative Creameries Ltd., for €500 million ($530 million).

Kerry Group said the structure change will make it a taste and nutrition company. Kerry Dairy produces consumer products such as butters and cheeses, as well as Irish dairy ingredients.

With the transaction, Kerry Co-Op will become direct owners of Kerry shares equivalent to 85% of the co-op's current shareholding, the company said.

Kerry Group said the proposed transaction will involve two phases, with the co-op first acquiring 70% interest in Kerry Dairy, with Kerry Group retaining 30% until the second phase, when the co-op will acquire the remaining 30%.

The transaction will include seven manufacturing facilities and more than 1,500 employees.

Kerry Co-Op chairman James Tangney said the cooperative and Kerry Group have a shared heritage that shaped the dairy industry.

"We are very pleased to have reached an agreement that will ultimately deliver full ownership of one of the leading dairy businesses in the country, while also, in effect, releasing [roughly 85%] of Kerry Co-Op’s Kerry Group shares into the hands of our members to be retained or sold by each of them at a time of their choosing,” Tangney said.

Kerry Group chief executive officer Edmond Scanlon said the transaction represented a significant step for Kerry.

“Our strategy of continuous business development and portfolio evolution aligned to our customers has been a key underpin of Kerry’s success over the years,” Scanlon said. “The proposed transaction will result in a global leader in taste & nutrition solutions and an end-to-end industry leader in dairy. Both businesses are perfectly positioned for success, thanks to the dedication and extraordinary contribution of our people over the years.”

A general meeting during which Kerry shareholders will vote on the transaction, the company noted, is set for Dec. 19.