08 Dec Cargill completes sale of flavour business to Kerry

Cargill has completed the sale of its global flavours business to Kerry, the ingredients & flavours and consumer foods group. The two companies announced in July 2011 that they were holding exclusive discussions and a definitive sales agreement was signed on September 22, 2011.

Having obtained clearance from competition authorities, Cargill and Kerry have now concluded the transaction. This deal includes flavours business activities in 22 countries and production facilities in three continents. The sale involves the transfer of around 700 employees in centres in Europe, South Africa, India, Malaysia, China, the USA, and South America. All staff will now join Kerry’s international workforce.

The Flavour Systems business – one of the world’s top flavour businesses – holds contracts with many of the world’s food and beverage companies.

The former Cargill division provides ingredients and flavours for the beverage, dairy, sweet and savoury categories including cheese, yoghurts and ice creams and is said to span 22 countries, with production facilities in Europe, North America and Asia.

As such, the completion of the acquisition will boost Kerry’s presence in the beverage sector, while Cargill’s broad geographic base could help Kerry increase global reach and growth potential in new and emerging markets.

Earlier this year Kerry confirmed that the takeover of the Cargill division will form part of a wider growth strategy that has already seen the Irish firm purchase other small to medium-sized flavours and food ingredients companies in the last decade.

Frank Hayes, director of corporate affairs at Kerry Group, did not rule out the possibility of further acquisition activity – explaining that Kerry is looking to grow its businesses both organically and through acquisitions.

Cargill to reduce workforce by 1.5%

In other news, Cargill has announced it will reduce its workforce by up to 2,000 of its 138,000 employees globally, a change of about 1.5%. The majority of the reduction will take place over the next six months worldwide. Cargill is providing affected employees with severance and outplacement support in keeping with its policies and with local laws and regulations.

The company said these actions are in response to the continued weak global economy and are part of an overall effort to reduce expenses and simplify work processes.

“As economic conditions change, so must we,” said Mike Fernandez, Corporate Vice President of Cargill Corporate Affairs. “Regrettably, this impacts talented people who have made important contributions to our company. These are difficult decisions but are necessary to better position the company for continued growth.”