Kerry Group has agreed to sell its UK and Ireland meats and meals business to Moy Park owner Pilgrim’s Pride for €819m (£703m).

The meats and meals business, which includes brands such as Richmond, Wall’s, Fridge Raiders and Galtee, was responsible for revenues of €828m in 2020.

Its meats business is a leading manufacturer of branded and private label meats, meat snacks, food-to-go and meat-free products in the UK and Ireland.

The meals business primarily serves the UK market and specialises in ethnic chilled and frozen ready meals, ready to cook ranges, and home delivery meals under the Oakhouse brand.

The business generated EBITDA of €86m last year, pre-tax profits of €86m and gross assets of €521m.

“Kerry’s strategy for the past 30 years has been to continuously evolve our portfolio, as we progressed on our journey to becoming a market-leading taste & nutrition company,” said Edmond Scanlon, CEO of Kerry.

“This transaction further enhances Kerry’s focus as a leading business to business ingredient solutions provider for the food, beverage and pharmaceutical markets. Pilgrim’s is a global provider of high-quality food products and I am convinced they will make an excellent future owner of the meats and meals business.

“I wish to thank the 4,500 employees of the business for their contribution to Kerry over many years.”

Fabio Sandri, CEO of Pilgrim’s, added: “We are pleased to have the opportunity to position Pilgrim’s as a leading prepared foods and branded products player through this acquisition.

“We look forward to welcoming Kerry Consumer Foods’ meats and meals business’ talented management team and other team members, led by Nick Robinson, to the Pilgrim’s family, and we look forward to working together to drive growth and deliver value for all of our stakeholders.”

The proceeds from the sale will be used for general corporate purposes and the strategic development of Kerry’s taste & nutrition business, which has become its core strategic focus.

The transaction is expected to close in the final quarter, subject to regulatory approvals.

Kerry said that, following the sale, it would separate and realign the remaining dairy-related activities within the consumer foods business.

It said its strategic review of the dairy business had been completed and there would be no disposal of the dairy business at this time.

Broker Jefferies said the deal brought Kerry “a step closer to pureplay value-add ingredients business”.

“The bull case on such a transaction is that it materially reduces Kerry’s exposure to branded foods (in the somewhat challenging categories of meat and convenience meals) and moves them a step closer to becoming a pureplay taste and nutrition ingredients provider, something we think the market has been hesitant to view Kerry as given the existing ancillary exposures,” it stated.

“We think this announcement will be taken well, both from a fundamental viewpoint, but also the market’s view of Kerry management.”

Kerry shares rose 1.2% on the news on Friday to €107.25.