Kerry Group has entered into exclusive negotiations to sell the trade and assets of its Sweet Ingredients Portfolio to IRCA for €500m.
IRCA is is a food company that specialises in chocolate, creams, and other high-quality semi-finished ingredients.
Kerry Group said the potential sale is subject to relevant regulatory approvals and routine closing adjustments.
It added that employee consultation and information processes have commenced in relevant jurisdictions.
"We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category," said Edmond Scanlon, CEO of Kerry Group.
"This transaction would represent another strategic development in Kerry's evolution, as we continue to look to enhance and refine our Taste & Nutrition portfolio, aligned to the areas where we can create the most value," he added
Kerry Group's Sweet Ingredients Portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.
Its operational footprint covers four manufacturing facilities in the US, and six facilities across the UK, the Netherlands, Germany and France.
In a statement, Kerry Group said the expected attributable financial results for the year ended 31 December 2022 include revenues of €405m and EBITDA of €41m.
"We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion," said Massimo Garavaglia, CEO of IRCA.
"The Sweet Ingredients Portfolio is a high-quality business with a differentiated set of technologies, and we are excited to welcome their talented team who, we believe, share our passion and drive to deliver the best for their customers and consumers."
Kerry Group said the combination of its Sweet Ingredients Portfolio and IRCA is expected to generate around €1 billion in revenues.
It said the potential sale is expected to close in the first half of this year, following the employee consultation and information processes and receipt of regulatory approvals.
On receipt, it said the proceeds from the potential sale are expected to be used by Kerry for general corporate purposes and the continued strategic development of the Taste & Nutrition business.
