Confirmation of PossibleOffer
Kerry Group PLC
12 June 2001
Not for release, publication or distribution in or into the United States,
Canada or Australia.
Kerry Group plc - proposed offer for Golden Vale plc
Kerry Group confirms that it has today approached the Board of Golden Vale plc
with a proposed offer to acquire the entire issued share capital of Golden
Vale. Under the terms of the proposed offer Kerry will exchange one new Kerry
Group plc share for every ten Golden Vale plc shares or as an alternative is
offering EURO1.37 for each Golden Vale share. It is the intention of the Board
of Kerry Group to approach this matter in a spirit of co-operation and
accordingly Kerry is seeking a recommendation for the proposed offer from the
Board of Golden Vale. Davy Corporate Finance Limited is acting exclusively for
Kerry in connection with the offer.
The Directors of Kerry consider the terms of the proposed offer to be fair and
reasonable to the shareholders of Golden Vale and provide an opportunity for
shareholders in Kerry and Golden Vale to benefit from the enhanced shareholder
value in Kerry Group on completion of the proposed transaction.
Should the Kerry proposed offer be accepted, the proposal confirms that the
Kerry milk price, less any collection charges already in place will be paid to
all Golden Vale suppliers of milk in the Republic of Ireland. In addition, the
Board of Kerry Co-operative Creameries Ltd, which owns 37% of the equity of
Kerry Group plc, has agreed to offer all Golden Vale milk suppliers the
opportunity to subscribe for A ordinary shares of IR£1 in Kerry Co-operative
Creameries Ltd. As shareholders in Kerry Co-operative Creameries Ltd, Golden
Vale milk suppliers would become an integral part of the Co-op electoral
structures.
In combining the Kerry and Golden Vale consumer foods businesses, significant
synergies would accrue in particular in the areas of convenience foods,
prepared meals, dairy and low-fat spreads, cheese, fluid milk and foodservice
offerings.
Commenting on today's announcement Kerry Group Managing Director Denis Brosnan
said:
'This transaction, if approved, will allow the shareholders of Golden Vale and
Kerry to benefit from the synergies of combining two growth oriented
convenience food businesses and through an expanded offering of menu items and
ingredients to the European foodservice sector. In particular it would further
the rationalisation of the dairy processing industry in Ireland and lead to
cost savings through greater efficiencies in operations and business
processes, distribution and marketing, streamlining of administrative
functions and economies of scale'.
'Since the mid 1980's, both Kerry and Golden Vale have been building
businesses and diversifying outside their traditional dairy industry base.
Kerry has built a global food ingredients business with annualised sales in
excess of EURO1.7 billion and in Europe the Group has established a highly
successful consumer foods business of approximately half that size with
leading branded positions and nationwide distribution networks in the Irish
and UK markets. Golden Vale's consumer foods business now accounts for more
than half its total sales. The combined consumer foods businesses would have
sales in excess of EURO1.3 billion and the dairy and agribusiness activities
also provide opportunity for significant cost savings through streamlining of
the product mix, restructuring of milk assembly and synergies in feed milling
and agri-trading'.
Mr Brosnan added that, apart from the complementary strength of Golden Vale
and Kerry in Europe, Golden Vale would become part of one of the major global
food ingredients companies, providing more opportunities for management and
employees in the combined business.
Enquiries:
Kerry Group plc Davy Corporate Finance
Frank Hayes Ivan Murphy
Director of Corporate Affairs
Telephone: + 353 66 7182304 Telephone: + 353 1 6796363
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