Johannesburg / ZA. (tbl) The Board of Tiger Brands Limited, the manufacturer of leading consumer branded products in South Africa, announced its decision to dispose of the company’s 51 percent stake in its Kenyan business, Haco Tiger Brands (E.A.) Limited (Haco), which it acquired in 2008.
According to Tiger Brands’ CEO Lawrence Mac Dougall, the company took the decision to sell its interest in Haco after a detailed review of the business was conducted, along with its partner, Dr Chris Kirubi. «The review evaluated the Haco business in the context of its mutual alignment with Tiger Brands’ long term strategic focus and core competencies. In addition to products manufactured and marketed by Haco under its own brands, the majority of Haco’s business lies in the manufacturing and distribution of products under licence. This is not aligned with our current operating model which is premised on full ownership of leading FMCG brands».
This has culminated in Dr Kirubi, who holds the balance of the 49 percent of the business, making an offer to Tiger Brands to purchase its 51 percent shareholding at a price that was considered fair and reasonable. Tiger Brands accepted the offer. «We thank Dr Kirubi for his invaluable insight and contribution to Haco over the past 9 years and are confident in Haco’s prospects under his leadership», says Mac Dougall.
Dr Kirubi commented on the partnership with Tiger Brands and the quality of engagement with the leadership team. «The partnership with Tiger Brands has been professional and constructive over the years and I am pleased with how we have managed this transaction. I have always been passionate about Haco’s success and I remain fully committed and dedicated to its growth and progress. My Board and I, together with our dedicated staff, look forward to driving the next chapter of Haco’s growth and innovation as Haco seeks to meet the needs of the growing and discerning market in Africa and beyond».
The agreement relating to the disposal of the shares is subject to a number of suspensive conditions, including receipt of the necessary regulatory approvals in Kenya.
Tiger Brands remains optimistic about opportunities in Africa. «The recent decisions to dispose of our interest in Haco and EATBI should not be viewed as a withdrawal from Africa. Rather, growth outside of South Africa will be based on refocusing our business on core categories and competencies», says Mac Dougall. «The intention with the renewed international strategy is for it to be accretive to domestic performance».
The impact of the Haco transaction on Tiger Brands’ earnings, headline earnings and net asset value per share will not be material.
