PIC agrees to buy majority stake in Karan Beef
Africa's largest asset manager values the deal by up to R5.2 billion.
The Public Investment Corporation (PIC) has concluded the acquistion of a majority shareholding in Karan Beef, a supplier of beef products, for a consideration of up to R5.2 billion.
The PIC, which manages investments worth R2 trillion on behalf of the Government Employees Pension Fund and other government funds, concluded the acquisition of Karan Beef together with Pelo Agricultural Ventures.
The size of the PIC's shareholding in Karan Beef was not disclosed.
The PIC, which is Africa's largest asset manager, has investments in the JSE-listed and unlisted space. The Karan Beef purchase would fall in the unlisted category.
The acquisition is subject to final approval by the Competition Commission, the PIC said on Tuesday.
Karan Beef was started by the Karan family farm in 1974, and the company is still fully owned by Ivor Karan. Its heard at the time comprised of less than 100 cattle and today it manages more than 150 000 cattle, which officially makes it the largest feedlot in Africa.
Karan Beef's Balfour-based (in Mpumalanga, South Africa) abattoir has the capacity of processing 2 100 herd of cattle every day. South Africa is Karan Beef’s biggest market, but it also has a substantial export market.
“This is a ground-breaking deal for agriculture in South Africa and we must celebrate the fact that the company will remain South African. We look forward to taking our new partners under our wings and sharing 45 years of knowledge and expertise with them”, said Ivor.
Apart from serving the South African market, Karan Beef is approved to export to UAE, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Mauritius, Seychelles, Maldives, People’s Republic of China and Hong Kong.
“This is a historic deal concluded in terms of our clients’ developmental investment mandate, which will support the much needed transformation in the agricultural sector. It will bring new entrants into the sector at ownership level and will be instrumental in bringing emerging farmers into the value chain of beef production in South Africa," said the PIC CEO, Dr Daniel Matjila, in a statement.
"We are, particularly, happy that the Karan family has decided to sell part of this important asset to South Africans, ensuring that ownership remains local and in black control. This is a significant transaction and must be celebrated,” he added.
Pelo Agricultural Ventures is a black-owned, managed and controlled investment holding company that operates in the agricultural sector in South Africa and the rest of the continent. “We are extremely proud to be part of this ground-breaking transaction and looking forward to working closely with the existing management team to grow the company”, said Pelo Agricultural Ventures CEO Aobakwe Kukama.