M&A

Tyson to Buy Stake in Brazilian Poultry Producer

The company said it sees growth potential in overseas markets.
Lauren MuskettAugust 30, 2019

Tyson Foods has reached an agreement to acquire a 40% stake in Brazilian poultry producer Grupo Vibra. The companies did not disclose the price.

“This investment will enable us to access poultry supplies in Brazil to meet the growing needs of Brazilian customers and of priority demand markets in Asia, Europe, and the Middle East,” Tyson’s group president, international and chief administration officer, Donnie King, said in a statement. “It’s part of our strategy to develop a more flexible supply chain and mitigate the volatility of our previous model, which relied primarily on U.S. exports.”

Grupo Vibra is headquartered in Montenegro located in southern Brazil. The company has 18 production units and more than 4,000 employees. It has customers in more than 50 countries outside Brazil.

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Under the terms of the agreement, Grupo Vibra said it would spin-off Agrogen, its genetics multiplication business, as a separate company.

The acquisition follows a string of deals by Tyson as it looks to boost its international business.

In February, Tyson announced it was acquiring operations in Thailand and in Europe from BRF S.A. in a $340 million deal. In November 2018, the company closed on its acquisition of Keystone Foods from Marfrig Global Foods. At the time, chief executive officer Noel White said Tyson saw some of its biggest growth opportunities in value-added foods and international markets.

In a statement, Tyson said it expects nearly 98% of protein consumption growth will happen outside the United States over the next five years. The company gets $7 billion annually in international sales, including $5 billion in U.S. export sales and about $2 billion from in-country sales.

The U.S. Department of Agriculture this week announced it was launching an investigation of Tyson and beef processing competitors over pricing practices. A fire at a Tyson processing facility in Holcomb, Kansas, on August 9 cut U.S. beef packing capacity by an estimated 6%.