Tiger Brands is selling its 51% stake in East African Tiger Brands (EATB), its Ethiopian joint venture, to partner East Africa Group (EAG).
In a filing with the Johannesburg Stock Exchange, Tiger Brands said: “Following a detailed review of the business, which was conducted together with our partner, including an assessment of EATBI´s core categories in the context of Tiger Brands´ long term strategic focus and primary competencies, it was decided that EATBI would be better positioned under the ownership of EAG.”
As a result of the process, EAG made an offer for Tiger Brands’ stake at a price that was “considered fair and reasonable”, Tiger said. Further financial details were not disclosed, however, the company did say the transaction’s impact on its earnings would not be “material”.
The deal, which remains subject to conditions such as regulatory approval, is expected to close “no later” than November.
EATBI manufactures a range of consumer goods including pasta, macaroni and flour.
Despite the sale, Tiger maintained that it is still looking at expanding in Ethiopia. “Ethiopia remains a market of significant potential and options will be explored to maximise opportunities in relevant product categories,” the company noted.
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The sale follows Tiger’s move to exit its loss-making Nigerian milling business. In December, the South African food maker revealed it had sold its 65.7% share in Tiger Branded Consumer Goods of Nigeria, to partner Dangote Industries for ZAR700m (US$46.6m).