South Africa-based Tiger Brands has agreed to sell its deciduous canned fruit business units Langeberg and Ashton Foods.
The sale, which comes five years after Tiger Brands announced its intention to exit, is to a newly formed company, NewCo.
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NewCo was established with the purpose of sustaining Langeberg and Ashton Foods and is made up of a consortium consisting of Ashton Fruit Producers Co-operative and an unspecified “development finance institution”, according to a statement today (16 May) from the publicly listed food and drinks business.
Tiger Brands said the cooperative, established in 2020, is made up of member producers from the Robertson, Ceres, Breederivier and Klein Karoo areas.
The sale price with NewCo has been agreed for just R1, or one US cent.
However, Tiger Brands added it will commit R150m ($8.2m) to establish a community trust that will benefit the residents of the broader Langeberg area through “socio-economic development initiatives”.
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By GlobalDataThe community trust will have a 10% shareholding in NewCo, with the consortium holding the balance of the equity. The transaction is expected to be completed within the second half of 2025.
Tiger Brands decided to sell the canned fruit business in 2020 amid its reshaping efforts and hired South Africa-based financial services group Absa as advisers.
The food and beverage producer said in May 2020 that it plans to reshape its entire portfolio.
CEO Tjaart Kruger said today: “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.”
“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 said: “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 are part of Tiger Brands’ International segment. It produces canned fruit and purees, including peaches, pears and apricots. Exports make up more than 80% of the business to markets such as 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.
Based in Ashton in the Western Cape province of South Africa, the deciduous fruit businesses employ around 3,000 permanent and seasonal workers.
