Tiger Brands sells Langeberg business to local fruit growers for R1

The deal includes a R150-million commitment by the food producer to establish a community trust aimed at socioeconomic development initiatives benefiting the Langeberg community. This trust will hold a 10% beneficial shareholding in NewCo, with the consortium retaining the remaining 90% equity. The sale will also safeguard more than 3,000 permanent and seasonal jobs in a region heavily dependent on the deciduous fruit industry.

Tiger Brands will invest R31-million to upgrade the effluent plant at Langeberg & Ashton Foods, ensuring compliance with environmental regulations and reinforcing its commitment to responsible corporate citizenship.

“The success of this sale will ensure the sustainability of the South African deciduous fruit industry and consequently improve the livelihoods of the Langeberg and Ashton Foods employees and the broader communities in these areas,” said CEO of Tiger Brands Tjaart Kruger.

Situated in Ashton, Western Cape, Langeberg & Ashton Foods has played a vital role in the local economy since it was established in 1940. The decision to sell the business is part of a strategic plan announced by Tiger Brands in May 2020, aimed at simplifying its operations and concentrating on its core areas of business.

“It has been a long journey to find the right partner with the ability and financial capacity to ensure the continued and sustainable operation of the Langeberg & Ashton Foods business,” said Anthony Dicey, chairman of the Ashton Fruit Producers Co-operative.

He said the efforts culminated in the signing of the sale of the business agreement, paving the way for the newly established NewCo, or Langeberg Foods Proprietary, to enter an exciting new era of supplying consumers with its well-known quality products.

Real impact

Langeberg & Ashton Foods forms part of Tiger Brands’ international segment, producing canned fruit and purées for export markets (more than 80% of the business) and supplying Tiger Brands’ culinary business unit with canned fruit under the KOO brand for southern African markets. As part of the deal, Tiger Brands and NewCo will enter into a contract manufacturing agreement for the purchase of canned fruit under the KOO brand.

KOO canned fruit

(Source: Supplied)

“The conclusion of the sale marks a significant milestone in Tiger Brands’ portfolio optimisation strategy and will enable management to deploy capital and drive focus on the core business that can deliver sustainable growth,” Kruger said.

Tiger Brands’ wider portfolio optimisation

The sale also fits into a broader pattern of portfolio simplification by Tiger Brands. In November 2024, the company announced the disposal of its baby wellbeing business, comprising baby toiletries and medicinal products, to an unrelated third-party purchaser for more than R600- million.

The baby wellbeing business included a range of trusted South African brands such as Elizabeth Anne’s and Phipp’s, while Tiger Brands retained its baby nutrition business, including the Purity brand, which remains a core part of its food manufacturing portfolio.

(Source: Tiger Brands)

Broader backdrop – financials and legal clouds

The company recently reported a modest 1% rise in revenue and a 4% increase in headline earnings per share for the year ended September 2024. Dividends rose 4.3%, while the share price has sprinted about 30% this year, fuelled more by market sentiment than stellar operational growth.

Read more: The Finance Ghost: Tiger Brands has a purr-fectly average year, but investors roar anyway