Tiger Brands is to dispose of its 24.38% equity interest in Empresas Carozzi in Chile for about $240m (R4.4bn).
The sale is in line with the group’s portfolio optimisation strategy, it said in a statement on Tuesday.
The proceeds comprise a purchase price of $181m and the seller’s pro rata portion of an extraordinary dividend of $59m.
Founded 126 years ago, Carozzi is a leading Chilean-based fast-moving consumer goods group operating within the grains, confectionery, sauces, dressings, baked goods, powdered beverages, ice cream and pet food categories. The group produces and markets food products throughout Latin America.
The buyer holds a 75.61% shareholding in Carozzi.
Tiger Brands acquired an initial interest in Carozzi in 1999, which was increased to 24.38% by 2001. The rationale for the original investment was to facilitate the expansion of Tiger Brands’ geographical presence within the Latin American region.
“Carozzi has performed pleasingly over the past 20 to 25 years, delivering notable returns and dividends over this time,” it said.
Tiger Brands’ revised vision, which it announced in December 2024, is to grow as Southern Africa’s leading consumer goods company — placing consumers at the centre of everything through its people and its brands. Further expansion into the Latin American region is no longer a strategic priority for the company.
Tiger Brands, which owns brands including Tastic Rice, Jungle Oats, All Gold and Albany, is valued at R49.6bn on the JSE.
The transaction “provides an ability for Tiger Brands to crystallise the value of its investment in Carozzi at an attractive valuation and marks another milestone in the simplification of Tiger Brands’ portfolio,” it said.
Management remains committed to further refining Tiger Brands’ portfolio through targeted disposals where these businesses are deemed noncore.
The proceeds of the disposal will be redeployed into the core business towards strategic projects that are anticipated to deliver a competitive advantage and enhance the return on invested capital.
Once the company’s investment requirements are funded, excess cash will be returned to shareholders in the form of share buybacks and/or special dividends, it said.
At the end of September 2024, the value of the net assets that are the subject of the transaction was just over R3bn and the earnings attributable to the asset were R621m.
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