Tyson: Keystone a great platform for international growth

Tyson Foods executives said that the acquisition of Keystone Foods was particularly attractive because Tyson saw the business as a great way to expand its international reach.

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STori, Bigstock
STori, Bigstock

Tyson Foods executives said that the thought of acquiring Keystone Foods was particularly attractive because Tyson saw the business as a great way to expand its international reach.

Tyson Foods announced on August 20 that it had entered into an agreement to acquire Keystone Foods from Marfrig Global Foods, a Brazil-based company, for $2.16 billion. Tyson’s CEO, Tom Hayes, and chief financial officer, Stewart Glendinning, answered analyst questions later that morning concerning the proposed acquisition, which is expected to close in the middle of fiscal year 2019.

The 2018 fiscal year will conclude at the end of September.

Keystone Foods, according to the WATTAgNet Top Poultry Companies Database, operates 25 manufacturing facilities in six countries across North America, the Asia Pacific region, the Middle East and Africa. In the conference call, Hayes addressed that the U.S.-based Tyson currently has facilities in China and in India, but the acquisition of Keystone Foods, also headquartered in the U.S., would help it further expand its reach, not only in terms of processing facilities in other markets, but additional customers in foreign markets.

“Keystone offers a significant foundation for international growth, with operations and exports in the fast-growing Asia-Pacific region, as well as exports in the key markets in Europe, the Middle East and Africa,” said Hayes.

“Keystone’s international presence and proven track record will transform Tyson Foods’ existing capabilities in the region, and promote further international expansion and export opportunities.”

Glendinning added: “When you look at the kind of business that we’re acquiring, it has large global kind of customers with whom we have good, strong relationships, and it is the kind of business operation that we are intimately familiar with. So, our ability to execute against those customer needs is very, very strong in starting an international business.”

Platform for more potential acquisitions

Hayes further stated that upon the closing of this acquisitions, more acquisitions on an international scale could follow.

Investors can view Keystone Foods as a “platform for us to build a true international business, and potentially acquiring additional assets,” Hayes said.

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