17 August 2020
Tiger Brands confirmed today that it has entered into two separate sale agreements for its value- added meat products business units (VAMP), as going concerns. The company announced its intention to dispose of the business in November last year. Subsequently, Tiger Brands received offers for its abattoir business at Olifantsfontein and for its meat processing businesses at Germiston, Polokwane and Pretoria.
Subject to the applicable regulatory approvals, the abattoir will be acquired by Molare Proprietary Limited, one of South Africa’s largest piggery businesses and one of the current main suppliers to the abattoir business. In addition, and subject to the necessary regulatory approvals, including the approval of the Competition Commission, the meat processing factories at Germiston, Polokwane and Pretoria will be acquired by Silver Blade Abattoir Proprietary Limited, a wholly-owned subsidiary of Country Bird Holdings. Country Bird is a dynamic agricultural business in Southern Africa, which supplies the market with processed chicken products, among other things.
According to CEO Noel Doyle, “one of the major outcomes we would have achieved by selling the businesses as going concerns, is that the jobs of almost 1000 employees will be safeguarded. This is no small matter, particularly given the escalating unemployment in South Africa in the context of the severely constrained environment and poor economic outlook.”
Although VAMP’s role within the Tiger Brands portfolio was earmarked for review in 2017 by the Tiger Brands Board, the tragic events of the listeriosis outbreak in 2017/18 led to the temporary closure of the manufacturing facilities and a delay in the evaluation process. “We felt that it was our duty to our employees, customers and consumers to ensure that the processed meats category – an important source of protein to many South Africans - properly recovered after the listeriosis outbreak. We spent a significant amount of time, energy and money ensuring that we have a sustainable business with world-class facilities and highly skilled staff at all the operations. We were confident that our operations would add tremendous value to a company for which meat processing is a better strategic fit.” Doyle further added that the company’s safety processes, operating practices and testing regimes are extremely robust, and will also transfer to the new owners as part of the sale agreements.
The company confirms that the sale and disposal process in no way affects its commitment to the Class Action legal process. “We cannot overstate the significant and far reaching consequences of the listeriosis crisis, particularly on the victims of the outbreak and their families. Tiger Brands remains committed to following due process to ensure that an equitable resolution of the matter is reached in the shortest possible time.”
In terms of the two transactions, any potential liability under the Class Action will not transfer to the new owners and, as part of the agreements, Tiger Brands indemnifies the purchasers for any exposure that they may have as a potential consequence of any Tiger liability being established on conclusion of the Class Action legal process.
The company will provide further communication on the transactions as and when appropriate.