Tyson Foods Looks to Sell Its Chinese Business

Tyson Foods, one of the largest US meat and processed food makers, announced it will divest its China poultry business which is estimated to have annual sales of $1.1 billion. This decision is in view of the increasingly challenging Chinese meat market and most major foreign companies divesting a combined $8.4 billion of Chinese assets this year.

Kane Wu, a Reuters contributor commented on China’s meat market stating “China’s meat market has become increasingly challenging, with livestock farm margins squeezed in the last two years due to weak demand during the COVID-19 pandemic and increased feed prices because of the Russia-Ukraine war.”

These pressures have forced the diversification trend among international producers. To advise on the divestment, Tyson Foods has hired Goldman Sachs. Other foreign companies disposing Chinese assets this year include U.S agricultural giant Cargill, who sold its China poultry business to private equity firm DCP Capital, and British consumer goods maker Reckitt Benckiser Group who sold its China infant formula and child nutrition business to investment firm Primavera Capital Group. Furthermore, Dutch dairy cooperative FrieslandCampina is selling its Friso infant nutrition brand in China.

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Recently, Tyson Foods also revealed plans to reduce costs by streamlining its U.S. chicken business including closing four more plants. Additionally, major Chinese feed and meat producer New Hope Liuhe is reviewing its businesses and considering bringing strategic investors in its poultry and food businesses.

As reported by Reuters, Tom Polansek, noted that “foreign companies have divested a combined $8.4 billion of Chinese assets across all sectors so far this year, following $13.5 billion of disposals in 2022.”

Tyson Foods operates throughout the industry chain in China, providing chicken, beef, pork, and processed foods. Tyson Foods reported $1.9 billion in sales from its international and other business segment that includes its China operations.

Source: Reuters