Tyson Foods Inc. of Springdale announced that it has an agreement to acquire stakes worth about $70 million total in two Saudi food companies.
The deal with publicly traded Tanmiah Food Company gives Tyson a 15% equity stake in Tanmiah subsidiary Agriculture Development Company, or ADC, and a 60% equity stake in Supreme Foods Processing Company.
ADC is a fully integrated poultry company that produces broiler chickens and operates hatcheries and feed mills, Tyson said in a news release. Supreme Foods produces a variety of cooked chicken and beef products with a distribution network spread across the Middle East, including Saudi Arabia, Kuwait, Lebanon, and Jordan.
Tyson said financial details will be available in Tanmiah’s third quarter financial statements. The deal is still subject to approval by Saudi regulators.
“This investment will enable us to access poultry supplies in Saudi Arabia to meet the growing demand for protein in the Middle East and other markets,” Chris Langholz, president of international for Tyson, said in the release. “Expansion into international markets is a key part of our strategic growth plan and we’re pleased to better serve customers in this region.”
As part of the agreement, Tyson and Tanmiah have committed to doubling the company’s production capacity in further processed products. The investment will also enable Tanmiah to introduce new complementary products to the market. Tyson also sees the partnership as a way to unlock long-term opportunities in the Halal food market, which provides food permissible under Islamic dietary rules.
As part of Tyson’s international growth strategy, the company plans to open seven new plants outside the U.S. over the next two years, with six in Asia and one in Europe. Tyson sales from international business and exports represented 14% of total company sales in fiscal year 2021.
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