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Tanmiah Food Co. Announces Sale Company's subsidiaries in the value of USD 70 million (equivalent to SAR 262.6 million) subject to customary price adjustments under the sale and purchase agreement.

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Introduction Tanmiah Food Company ("Tanmiah" or the "Company", 2281 on the Saudi Exchange) announces the signing of the transaction whereby US company Tyson International Holding Company, a wholly owned subsidiary of Tyson Foods, Inc., a company listed in the New York Stock Exchange (under the symbol TSN) ("Tyson") has agreed to acquire an equity stake in each of the Company's wholly owned subsidiaries, Agricultural Development Company ("ADC") and Supreme Foods Processing Company ("SFPC") for a consideration of USD 70 million (equivalent to SAR 262.6 million).

This transaction and the strategic partnership to be formed between the Company and Tyson is being entered into as part of the Company's ongoing efforts to meet the growing global demand for protein products.

After the transaction, the Company will maintain a 85% ownership in ADC and a 40% ownership in SFPC.

The Company will announce any further developments regarding the transaction in due course.

Transaction Details Sale of 15% of the Company's shareholding in ADC (a wholly owned subsidiary) and 60% of the Company's shareholding in SFPC (a wholly owned subsidiary) to Tyson.

The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and regulatory approvals.

The Company was advised by Ernst & Young Corporate Finance Limited as the financial advisor and Baker & McKenzie as the legal advisor.

Transaction Value USD 70 million (equivalent to SAR 262.6 million) subject to customary price adjustments under the sale and purchase agreement.
Transaction Terms The transaction closing is subject to customary closing conditions, including any required merger control and related approvals.

At completion of the transaction, the shareholders shall enter into shareholders' agreements in relation to the ownership, management and operations of each of SFPC and ADC.

Following Completion, the shareholders have agreed that:

• Tyson will contribute an amount of USD 21 million (or such other amount as may be agreed upon by the Shareholders) in consideration for newly issued shares in SFPC; and

• The Company will contribute an amount of USD 14 million (or such other amount as may be agreed upon by the Shareholders) in consideration for newly issued shares in SFPC, to fund the expansion of additional processing capacity of SFPC.

Parties of the Transaction Tanmiah Food Company (seller), Tyson International Holding Company (purchaser), and Tyson Foods, Inc. (guarantor).
Transaction Execution Date 2022-07-05 Corresponding to 1443-12-06
Description of the Business of the Asset forming the Subject Matter of the Transaction ADC:

The rearing and production of broilers, feedmilling and operation of hatcheries, and production, sale, and distribution of fresh chicken

SFPC:

The production of a variety of value-added pre-prepared chicken and beef products and, sales and distribution thereof

Asset Book Value The registered capital of ADC is SAR 20,000,000 and the registered capital of SFPC is SAR 8,625,000.
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Not applicable
Transaction reasons This transaction provides a strategic partnership with Tyson and will establish the foundation for the next phase of growth for Tanmiah through making use of Tyson’s well-established track record and global industry expertise to drive innovation across the production, sale and distribution of fresh poultry and further processed products, both domestically and internationally.

The transaction is also aligned to Tanmiah’s strategic expansion agenda and will result in doubling the Company’s production capacity in further processed products. It will also enable Tanmiah to introduce new Halal products to the international market, thus enhancing the diversification of the product portfolio of the Company.

In addition, it will enable the Company to enhance its operations through supply chain efficiency, larger scale of operations, and improved procurement procedures of grain and other commodities.

The Company will gain insights to industry know-how from a global leader in its field and obtain access to world-class training and development programs.

Expected Impact of the Transaction on the Company and Its Operations The transaction will boost and strengthen the Company's brand across the GCC and other markets.

It is anticipated that the transaction will be reflected in the consolidated financial statements of Tanmiah as at 30 September 2022.

Details of Using The Proceeds of the Asset Sale Funding of capacity expansion and other corporate purposes in line with the Company's strategy.
Related Parties N/A
Attached Documents  

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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