Tyson CEO: Marfrig wanted to keep Ohio beef patty plant

When Tyson Foods and Marfrig Global Foods reached an agreement for Tyson to acquire Keystone Foods, part of the agreement was that Marfrig would retain the Keystone beef patty processing plant in Ohio.

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Coprid, Bigstock
Coprid, Bigstock

When Tyson Foods and Marfrig Global Foods reached an agreement for Tyson to acquire Keystone Foods, part of the agreement was for Marfrig to retain the Keystone beef patty processing plant in North Baltimore, Ohio.

Speaking during a conference call on August 20, Tyson Foods CEO Tom Hayes said the beef patty plant was something Marfrig wanted to keep.

Reasons given by the Brazil-based Marfrig in April for wanting to divest of its U.S. subsidiary Keystone Foods, was to leverage its purchase of the majority stake in National Beef Packing Company and to place further focus on its beef operations. The National Beef transaction, which closed on June 6, enabled Marfrig Global Foods to become the world’s second-largest beef company.

According to the WATTAgNet Top Poultry Companies Database, Keystone Foods processes 300 million pounds of beef annually, but it also processes nearly 2 billion pounds of poultry, more than 32 million pounds of fish and 12 million pounds of pork annually.

And while Tyson Foods also is active in the U.S. beef industry, the company had no problems with Marfrig retaining the Ohio beef patty plant.

“The beef assets in the U.S. were not as strategic to us. That is something, of course as we went through the negotiations of the deal that was excluded and we were absolutely fine with that,” said Hayes.

However, Hayes added that the company’s planned acquisition of Keystone Foods does include beef assets in Australia.

About two hours prior to the conference call, Tyson Foods announced that it and Marfrig had reached the acquisition agreement. The proposed acquisition is expected to close in the middle of fiscal year 2019, the company stated in a press release. The 2018 fiscal year will conclude at the end of September.

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