Tyson Foods has reached an agreement to buy a 40% stake in the foods division of Grupo Vibra, a Brazilian producer and exporter of poultry products. Terms of the agreement were not disclosed, and the transaction is still subject to approval by Brazilian regulators.
The deal is part of Tyson's global growth strategy and aims to give the manufacturer greater flexibility in serving customers in key global markets. “This investment will enable us to access poultry supplies in Brazil to meet the growing needs of Brazilian customers and of priority demand markets in Asia, Europe and the Middle East,” said Donnie King, Tyson Foods’ group president, international and chief administration officer, in a media release. “It’s part of our strategy to develop a more flexible supply chain and mitigate the volatility of our previous model, which relied primarily on U.S. exports.”
Headquartered in Montenegro, Brazil, Grupo Vibra produces chicken products under brands Nat and Avia. Its facilities include hatcheries, laboratories, farms, feed factories and slaughterhouses that serve the Brazilian market and more than 50 countries around the world. As part of the agreement, Grupo Vibra will spin-off its genetics multiplication business, Agrogen, into a separate company.
“Tyson will add know-how and new business opportunities to speed up our growth,” said Gerson Luis Muller, Grupo Vibra chief executive officer, in the release. “This partnership will be important to further develop our businesses in Brazil and foreign markets, granting access to new technologies and investments mainly in R&D. We will capitalize on a global distribution network to reach new markets. We trust that this agreement will strongly contribute to improve the quality of our services, adding new products to our portfolio offered to clients and consumers.”
Estimates show that, over the next five years, nearly 98% of protein consumption growth will happen outside the U.S. “That’s why we’re growing our business outside the U.S.,” King said. “As the world population continues to grow, Tyson will grow with it.”
Since last year, Tyson has expanded its global presence through the acquisition of Keystone Foods, which includes operations in China, South Korea, Malaysia, Thailand and Australia, and BRF S.A.’s poultry businesses in Thailand and Europe. Tyson Foods currently generates $7 billion in international sales annually, including $5 billion in U.S. export sales and about $2 billion in in-country revenues.