South Africa-based Tiger Brands has agreed to sell its deciduous canned fruit business units, Langeberg and Ashton Foods.
The sale comes five years after Tiger Brands announced its intention to exit the sector, with the transaction set to be finalized with a newly formed company, NewCo.
NewCo was established to sustain Langeberg and Ashton Foods and comprises a consortium made up of Ashton Fruit Producers Co-operative and an unspecified “development finance institution,” as stated in the public announcement on May 16.
Tiger Brands indicated that the cooperative, founded in 2020, includes member producers from the Robertson, Ceres, Breederivier, and Klein Karoo regions.
The sale price to NewCo has been established at just R1, or one US cent.
However, Tiger Brands will commit R150 million ($8.2 million) to create a community trust aimed at benefiting residents of the broader Langeberg area through “socio-economic development initiatives.”
This community trust will hold a 10% share in NewCo, while the consortium retains the remaining equity. The expected completion date for this transaction is in the second half of 2025.
Tiger Brands opted to sell the canned fruit business in 2020 as part of its restructuring efforts, engaging South Africa-based financial services group Absa as advisers.
In May 2020, the food and beverage producer outlined plans to reshape its entire portfolio.
CEO Tjaart Kruger stated: “The conclusion of the sale marks a significant milestone in Tiger Brands’ portfolio optimisation strategy and will enable management to deploy capital and drive focus on the core business that can deliver sustainable growth.”
Moreover, he emphasized, “The success of this sale will ensure the sustainability of the South African deciduous fruit industry and, consequently, improve the livelihoods of the Langeberg and Ashton Foods employees and the broader communities in these areas.”
Anthony Dicey, chairman of the Ashton Fruit Producers Co-operative, remarked: “It has been a long journey to find the right partner with the ability and financial capacity to ensure the continued and sustainable operation of the Langeberg and Ashton Foods business.”
Langeberg and Ashton Foods fall under Tiger Brands’ International segment and produce canned fruit and purees, including peaches, pears, and apricots. Notably, exports account for over 80% of the business, reaching markets like Europe, China, Australia, and Japan.
As part of the deal, Tiger Brands and NewCo will enter into a contract manufacturing agreement for the food company’s KOO brand.
Located in Ashton, Western Cape province, the deciduous fruit businesses employ approximately 3,000 permanent and seasonal workers.