Marfrig reported to get bids for Keystone Foods in June
Brazilian company continues with plan to divest of Keystone Foods
Potential bidders for Keystone Foods are expected to deliver proposals to parent company Marfrig Global Foods by the end of June, according to a report.
An anonymous source who claimed to have direct knowledge of the situation told Reuters about the delivery of proposals from potential buyers, as well as who those bidders might be.
Marfrig Global Foods never identified any interested companies, but it did in May reveal in a notice to the market on the company website that five companies have qualified to take part in the second phase of bidding for Keystone Foods. However, the Reuter’s report, published on June 11, stated that those companies are Tyson Foods, Cargill, COFCO, China Investment Corp. (CIC), and Fosun International. None of the five mentioned companies confirmed their interest in Keystone Foods with Reuters.
Marfrig in April revealed its intent to divest of Keystone Foods, the tenth largest company in the United States, so it could better concentrate on its beef operation, and for leverage in acquiring a majority stake in National Beef Packing Company. The National Beef acquisition was finalized on June 6, Marfrig announced.
Keystone achieved a net revenue of US$678.7 million for the first quarter of fiscal year 2018, up from the US$667.2 million it reported for the first quarter of fiscal year 2017. The company reported that the demand for Keystone Foods products was high during the quarter in the foodservice, retail and convenience channels in both the U.S. and Asia Pacific/Middle East/Africa (APMEA) region, and that “in some cases, the expectation of promotional success required Keystone to build product inventory to meet high future demand, and to engage manufacturing partners when demand for certain products exceeded Keystone’s available capacity.”
Marfrig Global Foods is headquartered in Sao Paulo, Brazil, but Keystone Foods is headquartered in Huntsville, Alabama.
Marfrig Global Foods is also the former parent company of Northern Ireland-based poultry company Moy Park. Marfrig sold Moy Park to JBS in 2015, and JBS has since sold it to Pilgrim’s Pride.