Tanmiah Signs agreement with Tyson to acquire ownership stakes in two subsidiaries at value of $70 mln

Tanmiah Food Company (“Tanmiah” or the “Company”, 2281 on the Saudi Exchange) announced on Wednesday 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 SR 262.6 million).

This transaction and the strategic partnership to be formed between the Company and Tyson are 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.

The transaction details are represented in selling 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.

The transaction value is USD 70 million (equivalent to SR 262.6 million) subject to customary price adjustments under the sale and purchase agreement.

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,

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.

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.

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.