June 4, 2007

South Africa's Afgri to dispose of chicken assets through merger

Afgri is in talks to merge its animal feed and chicken unit with a rival, possibly Country Bird Holdings or Sovereign Foods, before spinning it off to shareholders later in 2007.

CEO Jeff Wright said he wants to attract investors who may sell their shares in Rainbow Chicken, South Africa's largest poultry producer, which is being acquired by Remgro.

Spinning the chicken business out would make Afgri much cleaner and simpler, analysts said.

Afgri currently accounts for a quarter of South Africa's grain trade, said

The unit spun off by Afgri may have a market value of about R1.3 billion (US$183 million). Country Bird is valued at R 898 million (US$126.5 million) and Sovereign Food at R 480 million (US$67.6 million).