South African food group Tiger Brands plans to sell its minority stake in Chile-based Empresas Carozzi for $240 million.
Carozzi, which is already a subsidiary, holds a 75.61% stake in Empresas Carozzi. The transaction will enable Carozzi to fully take over the confectionery, sauces, ice cream, and pet food maker, as stated by Tiger Brands.
Tiger Brands first invested in Empresas Carozzi in 1999 to enhance its footprint in Latin America, subsequently increasing its share to 24.38% in 2001.
This sale aligns with Tiger Brands’ “portfolio optimization strategy,” initiated under CEO Tjaart Kruger. The company firmly stated, “Further expansion into the Latin American region is no longer a strategic priority for Tiger Brands.”
The deal is set to be finalized on March 18, when ownership of Empresas Carozzi shares will officially transfer to Carozzi.
Proceeds from this divestment will be reinvested in core business operations to support Tiger Brands’ strategic initiatives. Any remaining capital will be returned to shareholders via share buybacks or special dividends, according to the company’s filing.
Per Tiger Brands’ revised vision announced in December, the company aims 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 in November last year, Kruger initiated a plan to reduce 20% of SKUs across a diverse product portfolio, including bakery, breakfast cereals, confectionery, baby food, soft drinks, and home/personal care products.
Maize and sorghum, staples in South African diets, have been identified as “underperforming categories” targeted for disposal.
For the year ended September 30, 2024, the company reported a slight revenue increase of 1% to R37.7 billion ($2.02 billion). Group operating income also grew by 1% to R3.1 billion.
