Cargill inches closer to acquiring Zambeef's soy crushing subsidiary

Cargill and Zambeef Products PLC are close to concluding a deal for the former to purchase Zamanita Limited, the soybean crushing and refining subsidiary of Zambeef.

The deal has been formally approved by Cargill''sBoard of Directors while Zambeef''s shareholders voted to approve the transaction in an extraordinary general meeting (EGM) of shareholders.

The share sale agreement is for the 100% purchase of Zambeef''s shareholding in Zamanita for a total cash consideration of US$25.7 million.

Currently, the transaction is still subject to satisfaction of a number of conditions precedent, including the receipt of approval from the relevant competition authorities. It is expected to be completed within the next few weeks.

Zamanita is one of the largest edible oil and soymeal producers in Zambia, serving the local refined oils market as well as both domestic and export markets for soymeal. On completion of the sale, Cargill will acquire all of the company''s debt, assets and brands. Zamanita''s employees will also transfer to Cargill as part of the agreement.

"Cargill (has) been operating in Africa for over 30 years. Oilseed crushing and refining is one of our core global capabilities, and buying this business will allow us to bring our world class expertise to the Zambian market while meeting our strategic intent to grow in Africa", said Johan Steyn, the head of Cargill''s grain and oilseeds business in Africa and the Middle East.

"We believe that African agricultural production is a critical part of any future solution to feeding the growing global population", he added.

Commenting on the transaction, Zambeef''s chairman, Dr Jacob Mwanza, said: "The disposal will allow Zambeef to focus on growing its core business, which is the retailing of cold chain meat and dairy products, delivered through the Group''s extensive processing, distribution and retail network. The move will also unlock value by freeing capital and cash flow for investment elsewhere and to reduce gearing."

Lezanne van Zyl, the general manager of Cargill''s business in Zambia, explained that acquiring Zamanita will help to expand the company''s range of service, crop inputs, advice and market access for farmers.

"By leveraging our existing (corn) and cotton origination network, we will provide opportunities for farmers to access the soybean market", van Zyl said.

Through investments, Cargill plans to expand the capacities of the crushing and the refining facilities and bring them in line with the company''s network of over 1,000 state-of-the-art plants in 67 countries.