Baker McKenzie advises on strategic transaction in Saudi Arabia’s agrifood sector

Baker McKenzie, has advised Saudi-listed Tanmiah Food Company (“Tanmiah”) as it entered into a strategic partnership with US-listed Tyson Foods, Inc. (“Tyson Foods”) to accelerate growth in agrifood and poultry production capacity and to meet growing global protein demand.

As part of the transaction, Tyson Foods will acquire a 60% equity stake in Supreme Foods Processing Company (“SFPC”), and a 15% equity stake in Agriculture Development Company, both wholly-owned subsidiaries of Tanmiah for USD 70 million. Tyson has also committed USD 21 million of capital and Tanmiah has committed USD 14 million of capital to fund the construction of processing facilities to increase the processing capacity of SFPC. In addition, Tanmiah and Tyson Foods, will look to explore long-term opportunities in the fast-growing global halal market and consider jointly developing a new global halal brand. Signed on 5 July 2022, the transaction is subject to merger control and regulatory approvals in Saudi Arabia.

The Baker McKenzie team was led by M&A partner Adnan Doha, who was supported by senior associate Stephanie Samuell and a team across the UAE and Saudi Arabia. The Saudi team comprised Karim Nassar, Yousef Bugaighis, Rami Younes, Mustafa Rajab and Hessa AlAiban, who advised on Saudi corporate and regulatory matters, and David Monnier and Marwan Othman, who advised on Saudi merger control matters. The UAE team also included Osama Audi, Marcos Spanos, Neil Williams, Jaanzeb Khan and Razan Obeidat, who provided transaction support.

Ernst & Young Corporate Finance Ltd. acted as financial advisor to Tanmiah and DLA Piper acted as legal counsel to Tyson Foods.

Adnan Doha, M&A and private equity partner in Dubai, commented,“The strategic partnership is expected to create synergies for both Tanmiah and Tyson Foods across their agrifood supply chains as they look to jointly accelerate growth and expand across the GCC and international markets. We look forward to assisting the Tanmiah team in completing the necessary closing conditions and getting this transaction across the line.”

Tyson Foods is one of the world’s leading food companies and a recognized leader in protein, while Tanmiah, is one of the longstanding Saudi Arabian producers of fresh value-added poultry and other meat products, animal feed and health products, and a fast-food brand franchise operator. Through this partnership, Tanmiah will drive innovation across its supply chain by leveraging Tyson Foods’ global industry expertise, reinforcing its position in the regional agrifood market and its commitment to supporting the Kingdom’s food security goals.