GRACEKENNEDY Limited has disclosed that it paid $3.15 billion to acquire the remaining 50 per cent stake in Dairy Industries (Jamaica) Limited from Fonterra Co-operative Group Limited, giving investors their first indication of the cost of the transaction announced earlier this year.

The Jamaican conglomerate completed the buyout on January 28, converting Dairy Industries from a long-standing joint venture into a wholly owned subsidiary and giving GraceKennedy full control of the dairy manufacturer as it expands its food manufacturing operations across regional and diaspora markets.

Dairy Industries, which produces cheese under the Tastee brand, yoghurt under the This Is Really Great label, and powdered milk under the Anchor brand, generated $6.34 billion in revenue in 2025, up seven per cent year-over-year. Profit before tax rose 23 per cent to $1.35 billion, while net profit increased 22 per cent to $1 billion.

The company has been jointly owned by GraceKennedy and Fonterra since 1996, although Dairy Industries itself dates back to April 1964. Prior to the acquisition GraceKennedy accounted for the operation as an associate company, with its investment valued at $2.54 billion in 2025.

Financial statements show the dairy business continued to expand during the year, with its asset base growing 28 per cent to $7.82 billion, while net assets increased 12 per cent to $5.09 billion. Cash balances doubled to $585.24 million, with current assets reaching $6.03 billion.

The business has also provided steady dividend income to GraceKennedy over the years. Dairy Industries paid $400 million in dividends in 2025, of which GraceKennedy received $200 million. Between 2016 and 2025 the dairy producer distributed $4.3 billion in dividends, with GraceKennedy collecting $2.15 billion.

The buyout comes as Fonterra restructures its global operations. The New Zealand-based co-operative is finalising the sale of its consumer and associated businesses — Mainland Group Holdings Limited — to B.S.A. SAS (Lactalis) for NZD$4.22 billion (US$2.48 billion). The sale includes the Anchor and Mainland brands, though Fonterra will continue supplying milk and related products to the divested operations as it shifts focus to business-to-business ingredients and food service.

“As we look ahead, GK Foods is well positioned for improved performance, supported by focused recovery initiatives, supply chain stabilisation, disciplined cost management, the strength of our international footprint, and continued investment in our brands,” stated GK Chairman Professor Gordon Shirley and GK Chief Executive Officer Frank James in the report to shareholders.

The Dairy Industries acquisition represents GraceKennedy’s latest move to consolidate ownership of businesses within its food segment. In recent years the group acquired the remaining 65 per cent interest in Catherine’s Peak Bottling Company Limited through transactions completed in February 2023 and January 2025 for a combined $1.12 billion, shifting the bottled water company from an associate to a subsidiary.

GraceKennedy has also expanded its regional distribution network. On February 2 the company appointed Massy Distribution as its distribution partner for food and beverage products in Trinidad and Tobago, replacing Hadco Limited as distributor for Grace Foods LACA.

Hurricane Melissa drags earnings

While the acquisition underscores GraceKennedy’s strategic expansion in food manufacturing, the group’s overall financial results were affected by the passage of Hurricane Melissa in October 2025.

GraceKennedy reported consolidated revenue of $177.79 billion for the year, up six per cent, with the food segment accounting for the majority of earnings at $139.21 billion. Jamaica generated $99.22 billion, representing 56 per cent of total revenue, while overseas markets accounted for the remaining 44 per cent.

Operating expenses rose eight per cent to $172.99 billion, however, largely due to higher insurance claims following the storm. As a result, operating profit declined 19 per cent to $10.19 billion.

Insurance service expenses surged 154 per cent, increasing from $6.70 billion to $17.05 billion, largely reflecting claims within the group’s general insurance operations. GraceKennedy said its reinsurance programme helped offset part of the impact, generating a net gain of $2.91 billion from reinsurance contracts compared with an expense of $4.66 billion in 2024.

“The hurricane resulted in one-off expenses for GK, related to elevated insurance claims and the temporary closure of our Grace Food Processors (GFP) Meats plant in Savanna-la-Mar, Westmoreland — one of the parishes which was hardest hit by the hurricane,” the company said in its quarterly report.

After accounting for finance costs and earnings from associate companies, GraceKennedy’s profit before tax declined 17 per cent to $10.29 billion. Net profit fell 18 per cent to $7.25 billion, with $6.89 billion attributable to shareholders, while earnings per share stood at $7.

The group’s asset base increased 13 per cent to $266.59 billion, supported by $51.02 billion in loans receivable, $63.08 billion in investment securities, and $33.69 billion in cash. Total liabilities rose 17 per cent to $169.88 billion, while total equity grew six per cent to $96.71 billion, including $92.87 billion attributable to shareholders.

GraceKennedy paid total dividends of $2.35 billion, or $2.37 per share, during the year. The company’s shares closed Monday at $72.23 on the Jamaica Stock Exchange, giving it a market capitalisation of $71.43 billion. Its shares ended trading at TT$3.31 on the Trinidad and Tobago Stock Exchange, leaving the stock down five per cent year to date.

The company is scheduled to pay a $0.55 dividend, totalling $543 million, on April 9 to shareholders on record as of March 16 and will host a virtual investor briefing at 2 pm on March 11.

The year also brought leadership changes within the group, including Frank James assuming the role of group CEO and Steven Whittingham becoming chief executive officer of GraceKennedy Financial Group Limited. Tammara Glaves-Hucey was appointed head of the general insurance business, while Chaluk Richards became head of life and health insurance in October 2025. Durval Williams was appointed chief audit executive on January 2.