Tyson Foods to Buy Parts of BRF S.A. for $340M

by Lance Turner  on Thursday, Feb. 7, 2019 6:54 am   2 min read

Noel White (Tyson Foods Inc.)

Tyson Foods Inc. of Springdale announced Thursday that it had reached an agreement to buy the Thai and European operations of BRF S.A. for $340 million.

The deal includes four processing facilities in Thailand, one in the Netherlands and one in the United Kingdom. The company said the acquisition builds on a strategy to "expand offerings of value-added protein in global markets."

"As noted when we acquired Keystone Foods on November 30, we believe some of our biggest growth opportunities are in value-added foods and international markets," President and CEO Noel White said in a news release. "In addition to domestic benefits, the Keystone acquisition provided us with a scalable production platform in the Asian poultry market.

"The acquisition of these BRF facilities will help complement and strengthen our presence in Thailand, and provide new capabilities in Europe, enhancing our ability to serve growing global demand for value-added protein."

The deal is expected to close before the end of the company's fiscal third quarter.

More: Also Thursday, Tyson Foods reported first-quarter earnings.

BRF S.A. is a Brazilian food processing company with more than 30 brands. Its products include meats, processed foods, frozen vegetables and pastas.

In Thailand, Tyson is acquiring vertically integrated poultry operations that include a feed mill, hatchery, breeder farms and contract growing operations that supply four poultry processing facilities. The four plants produce a range of fresh and frozen, value-added raw and fully cooked poultry products including specialized cuts for retail and foodservice customers in Asia and Europe. 

The processing locations in the Netherlands and the U.K. are supported by in-house operations that process chicken for retail and foodservice customers in Europe.

Donnie King, president of Tyson Foods' international division, indicated that the company made the deal with an eye toward protein product outside the U.S.

"It's estimated that approximately 90 percent of global protein consumption growth will occur outside the United States, with 60 percent of the volume growth coming from Asia over the next 5 years," King said. "Increasing our international footprint with in-country operations and export capabilities will help Tyson Foods strategically access new markets and better serve the growing global demand for our value- added protein."

The acquisition is the first announced since White took over as CEO in September, but Tyson Foods has been in acquisition mode since 2017, when former CEO Tom Hayes launched a strategy to become the world's top producer of sustainably sourced protein. 

Earlier this week, CNBC cited sources that said Tyson was negotiating the possible purchase of privately held Foster Farms for $2 billion. Neither company would comment, but Foster noted that it "has thrived as a family-owned company for 80 years. We are fully confident in our future success as a stand-alone company."



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