Kerry Group has sold its Irish dairy business Kerry Dairy Ireland to Kerry Co-Operative Creameries (Co-Op) for £414.6m (€500m).

The sale of Kerry Dairy Ireland, which manufactures popular dairy products like cheese and spreads sold in the UK and Ireland, follows the business reporting net sales of £1.063bn (€1.283bn) and EBITDA of £44.2m (€53.4m) last year.

The sale is expected to happen in two phases. Kerry Co-Op will initially acquire 70% of Kerry Dairy Ireland, however over the next few years, Co-Op will then have the option to purchase the remaining 30% from Kerry Group, allowing it to eventually take full ownership.

Kerry Group chief executive officer Edmond Scanlon said: “The proposed transaction represents a significant step in Kerry’s 50-year journey. 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.

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“Both businesses are perfectly positioned for success, thanks to the dedication and extraordinary contribution of our people over the years.”

He added: “On completion, Kerry will become a pure play global business to business taste and nutrition company, with sustainable nutrition at its core, while also supporting our financial objectives of continued market outperformance, strong margin progression, and delivering greater returns for our shareholders.”

The sale comes amid Kerry Group’s strategic transformation to become a global taste and nutrition solution company, and follows portfolio developments over recent years including the build out of its proactive health, food protection and preservation, and enzymes platforms.

In 2021, the group completed the sale of its consumer food’s meats and meals arm to Pilgrim’s Pride Corporation for £704m (€819m).