Kerry Group will decide by early next month whether to make a bid for the bakery and seasonings business being sold off by the Australian group, Burns-Philips. The Australian business has sales of £80 million and is likely to be sold for more than £40 million.

Kerry managing director Mr Denis Brosnan said yesterday that Kerry had taken no decision on whether to bid for the Australian business but added that finance would not be a problem. Availability of management could, however, pose a problem, with Kerry's management resources expected to be focused on integrating the £286 million Dalgety acquisition over the next couple of years.

"It's a good fit but it's in the wrong place at the wrong time" said Mr Brosnan on the Burns-Philips business. Speaking after an extraordinary general meeting which approved the Dalgety acquisition, Mr Brosnan also said that Kerry would be investing heavily over the next year in recently-acquired businesses in Malaysia and Brazil. He added that the Brazilian acquisition would give Kerry access to South American markets with a population of 240 million under the Mercasur Free Trade Treaty. Mr Brosnan told shareholders the Dalgety acquisition would bring £280 million in additional sales, £22.6 million in additional operating profits and additional assets of £142 million.

"It makes Kerry by far the leading seasonings and coatings company in the world, with well over 30 per cent of the market. We will have a market share in Britain of around 50 per cent, 25 per cent in Europe and over 25 per cent in Australia and south-east Asia. Nobody else has anything like the same volume of sales" he said. On Dalgety, Mr Brosnan said the British company had spent the last five years buying up companies all over Europe. "We have bought the acquirer," he added. He said the acquisition also brought Kerry new markets in India and the countries of the former Soviet Union.

"The rationalisation and merger of the businesses will bring significant profit improvements and we intend to get stuck into them as soon as possible," he said, adding that the rationalisation would probably include the closure of some Dalgety plants in Britain and Germany. Asked by one shareholder about the implications of European Monetary Union, Mr Brosnan said: "The closer to 2.41 deutschmarks we go in, the better. EMU will have huge advantages because the effect of exchange rates will be reduced. I've been a strong advocate of the single currency and the sooner we have it the better."

Since Kerry announced the successful Dalgety deal at the end of January, its share price has risen impressively as the market signalled its approval of the terms of the deal and the subsequent sale of most of Dalgety's flour milling business to Tomkins.

While the net cost of buying the Dalgety ingredients business is undoubtedly on the high side at £286 million, the view in the market is that Kerry's undoubted track record in making comparatively expensive acquisitions work is reason enough to support the shares.

Kerry's own staff also have an excellent opportunity to invest in their company at an immediate paper profit, with last month's fund-raising involving a deferred payment of 820p per share for the two million shares set aside for staff.

With soft loan arrangements available for staff and with the prospect of an immediate paper gain of more than £1 a share, that placing with staff is likely to be fully subscribed.