Kerry €23bn deal that got away

At more than €23 billion, the acquisition of the nutrition and biosciences business of the US chemicals group DuPont would have been the largest deal ever carried out by an Iseq-listed company and would have seen Kerry Group double in size, overtaking CRH as the largest business on the Irish stock exchange. Presuming it had remained on the Irish market.

Kerry had been considered a shoo-in to acquire the DuPont unit but it appears to have been, as one insider put it, “pipped at the post” by New York-based International Flavors & Fragrances (IFF). DuPont said the deal valued the Nutrition and Biosciences (N&B) business at $26.2 billion based on IFF’s share price on Friday.

DuPont has been transforming itself following the break-up of DowDuPont, the chemical giant created in a 2017 megadeal.

The purchase would make "strategic sense, allowing IFF to offer a more complete product suite to a broader customer base", according to Mark Astrachan, an analyst at Stifel, who said last week the deal would make it the largest global speciality ingredients company.

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Footprint

Kerry has long wanted to expand its footprint in the better health/disease prevention space and DuPont was seemingly the perfect fit for its current suite of businesses. " From a Kerry perspective, the announcement that two of its rivals will merge to become the clear industry leader will be a blow to the company," said Goodbody analyst Jason Molins.

“Kerry’s share price will likely come under pressure as the perception was that Kerry was in pole position to merge with DuPont’s N&B business,” he said while noting that Kerry still had plenty of firepower for other acquisitions.

Kerry shares were down just under 3 per cent at €109.80 yesterday. Mega mergers are never easy to pull off, either financially or culturally. Just ask shareholders in Aryzta.

So it remains to be seen whether this was the one that got away or a lucky escape for Kerry.