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Sale of Tiger Brands’ 24.38% interest in Empresas Carozzi S.A.
TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
("Tiger Brands" or the "Company")
SALE OF TIGER BRANDS' 24.38% INTEREST IN EMPRESAS CAROZZI S.A.
1. INTRODUCTION
In line with the Company's communicated portfolio optimisation strategy, shareholders are advised
that Tiger Brands has, through its wholly owned subsidiary, Inversiones Tiger Brands South
America Limitada (the "Seller"), entered into a share purchase agreement ("SPA") for the disposal
of its 24.38% equity interest in Empresas Carozzi S.A. in Chile ("Carozzi") to Carozzi S.A., a public
company listed on the Santiago Stock Exchange ("CSA" or the "Purchaser") (the "Transaction").
2. DESCRIPTION OF CAROZZI
Founded 126 years ago, Carozzi is a leading Chilean-based fast-moving consumer goods group
operating within the grains, confectionary, sauces, dressings, baked goods, powdered beverages,
ice cream and pet food categories. Carozzi produces and markets food products in various
countries throughout Latin America. The Purchaser holds a 75.61% shareholding in Carozzi.
3. RATIONALE FOR THE TRANSACTION
Tiger Brands acquired an initial interest in Carozzi in 1999, which was increased to 24.38% by
2001. The rationale for the original investment was to facilitate the expansion of Tiger Brands'
geographical presence within the Latin American region. Other objectives included driving a
"connect and develop" research and development model where key learnings could be leveraged
from Carozzi. Carozzi has performed pleasingly over the past 20 to 25 years, delivering notable
returns and dividends over this time.
Tiger Brands' revised vision, as communicated in December 2024, is to grow as Southern Africa's
leading consumer goods company – placing consumers at the centre of everything through our
people and with the most accessible loved brands. As such, further expansion into the Latin
American region is no longer a strategic priority for the Company. In addition, Tiger Brands' portfolio
optimisation strategy is underpinned by ensuring the Company focuses on and deploys capital and
resources in the areas within which the Company has direct control. Accordingly, following an
extensive strategic and financial review, the decision was made to pursue a disposal of Tiger
Brands' interest in Carozzi. The Company subsequently entered into negotiations with CSA,
culminating in the Transaction.
The Transaction provides an ability for Tiger Brands to crystalise the value of its investment in
Carozzi at an attractive valuation and marks another milestone in the simplification of Tiger Brands'
portfolio. Management remains committed to further refining Tiger Brands' portfolio through
targeted disposals where these businesses are deemed non-core.
4. TOTAL TRANSACTION CONSIDERATION AND APPLICATION OF THE PROCEEDS
The Purchaser will acquire the Seller's 24.38% equity interest in Carozzi ("Sale Shares").
As a consequence of the divestment process, the Seller will receive a total consideration of USD
240 million (two hundred and forty million United States Dollars, approximately ZAR 4,440 million 1)
before applicable taxation charges, comprising of:
• a purchase price of USD 181 million (one hundred and eighty one million United States
Dollars) (approximately ZAR 3,348 million) ("Purchase Price"); and
• the Seller's pro rata portion of the Extraordinary Dividend (as defined below), being an
amount of USD 59 million (fifty nine million United States Dollars) (approximately ZAR
1,092 million).
In line with the Company's capital allocation framework the proceeds will be redeployed into the
core business towards strategic projects that are anticipated to deliver a competitive advantage and
enhance the return on invested capital. Once the Company's investment requirements are funded,
excess cash will be returned to shareholders in the form of share buybacks and/or special dividends
as previously guided.
5. CONDITIONS PRECEDENT
The SPA is subject to fulfilment or waiver (to the extent legally permissible) of suspensive conditions
that are customary for a transaction of this nature including, but not limited to, shareholders of
Carozzi approving the distribution by Carozzi of an extraordinary dividend of not less than USD
240 million (two hundred and forty million United States Dollars) ("Extraordinary Dividend")
("Conditions Precedent").
The last of the Conditions Precedent must be fulfilled or waived (to the extent legally permissible)
by not later than 18 March 2025 ("Closing Date"), which date may be extended by agreement
between the Purchaser and the Seller in writing.
6. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The SPA contains representations, warranties, and indemnities by the Seller in favour of the
Purchaser which are customary for a transaction of this nature.
7. COMPLETION DATE OF THE TRANSACTION
The Transaction will be implemented on the Closing Date, whereupon ownership of the Sale Shares
shall pass to the Purchaser.
8. FINANCIAL INFORMATION
As per the Tiger Brands annual financial statements for the financial year ended 30 September
2024, which were prepared in terms of International Financial Reporting Standards, the value of
the net assets that are the subject of the Transaction was ZAR 3,026 million, and the earnings
attributable to the net assets that are the subject of the Transaction were ZAR 621 million.
9. CATEGORISATION OF THE TRANSACTION
In terms of the Listings Requirements of the JSE Limited, the Transaction is classified as a Category
2 transaction for Tiger Brands and does not require the approval of shareholders.
1
Based on a USD/ZAR exchange rate of 18.50
28 January 2025
Bryanston
Financial advisor to Tiger Brands:
Rand Merchant Bank, a division of FirstRand Bank Limited
Sponsor to Tiger Brands:
J.P. Morgan Equities South Africa Proprietary Limited
Chilean legal advisor to Tiger Brands:
Valdes & Cía
South African legal advisor to Tiger Brands:
Edward Nathan Sonnenbergs Inc.
Date: 28-01-2025 07:05:00
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