The board of Kerry Co-op has formally voted in favour of a historic deal that would see it buy a 60% majority stake in Kerry Group’s primary dairy business.

The vote paves the way for negotiations between Kerry Co-op and Kerry Group to enter the critical phase in which a formal valuation will be put on the business.

Valuation

Once advisers from both sides agree on a valuation, Kerry Co-op will begin to tease out how it plans to fund the transaction.

It had been hoped Kerry Group could offer the 60% stake in the business at a discount but stock market rules mean this is now unlikely.

Instead, a goodwill payment to milk suppliers of 5c/l to 6c/l could be on the table as a sweetener for the deal.