Tiger Brands agrees to divest meats business in South Africa

South African food company Tiger Brands has agreed to sell its processed meat divisions in two separate transactions for R428m ($24.7m).

Molare Proprietary will buy Tiger Brands’ abattoir business in Olifantsfontein while Silver Blade Abattoir Proprietary, a wholly owned subsidiary of Country Bird Holdings, will acquire the meat processing factories in Germiston, Polokwane and Pretoria.

Molare is a leading piggery business in South Africa and a key supplier to the abattoir.

Under the deal, Molare will acquire the abattoir for R117m ($6.7m) while Silver Blade will acquire meat processing factories for R311m ($17.8m).

Reuters quoted Tiger Brands chief executive Noel Doyle as saying: “One of the major outcomes we would have achieved by selling the businesses as going concerns is that the jobs of almost 1,000 employees will be safeguarded.”

The company’s meat business closed in 2018 after the South African Health Ministry confirmed the listeria outbreak started at the company’s Enterprise Foods facility.

According to Tiger Brands, the divestiture of the meat processing business is part of a strategic review initiated before this outbreak. The review concluded that the meat business was ‘not an ideal fit’ within the group’s portfolio.

The company is currently facing a class-action lawsuit over the listeriosis outbreak, which killed more than 200 people in the country.

Human rights lawyer Richard Spoor filed the lawsuit, noting that there is enough evidence against the company.

The South African food producer added that any potential liability under the lawsuit will not transfer to the new owners.

Last November, Tiger Brands reportedly considering selling its processed meats business.