South African food group Tiger Brands plans to sell its minority stake in Chile-based Empresas Carozzi for $240m.
Carozzi, the buyer and a subsidiary of the acquired business, already holds a 75.61% stake in Empresas Carozzi and will now fully takeover the confectionery, sauces, ice cream and pet-food maker, according to a statement from Tiger Brands.
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Tiger Brands first invested in Empresas Carozzi in 1999 to expand its presence in Latin America and subsequently increased its interest to 24.38% in 2001.
The disposal of the stake is part of Tiger Brands’ “portfolio optimisation strategy” initiated by CEO Tjaart Kruger. “Further expansion into the Latin American region is no longer a strategic priority for the company,” Tiger Brands said.
The deal is scheduled to be finalised on 18 March, at which point ownership of the Empresas Carozzi shares will transfer to Carozzi.
The proceeds from the disposal will be reinvested into the core business to support strategic initiatives and any surplus cash will be returned to shareholders through share buybacks and/or special dividends, the South African company said in its filing.
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By GlobalDataAs per Tiger Brands’ revised vision announced in December, the company intends to focus on becoming Southern Africa’s “leading” consumer goods company”.
In December, the company announced plans to sell its maize and sorghum cereal lines.
Since taking the helm at South Africa’s largest food business in November last year, Kruger set in motion a plan to trim 20% of SKUs across what is a diverse product portfolio, from bakery and breakfast cereal, confectionery and baby food, to soft drinks, and home and personal care.
Maize and sorghum, consumed as cereals in South Africa, were identified among the “underperforming categories” destined for disposal.
For the year ended 30 September 2024, the company reported a 1% increase in revenue to R37.7bn ($2.02bn).
Group operating income grew by 1% to R3.1bn.
