October 16, 2008

Tyson Foods plans to take advantage of the global credit crunch to acquire domestic companies and expand internationally, as the financial crisis reduces the costs of potential acquisitions.

The company have about US$1.5 billion in the bank ready to take advantage of opportunities be they domestic or in the three growth countries of Brazil, China and India, according to chairman John Tyson.

Tyson is likely to purchase poultry companies in the US and also plants that prepare beef and pork products. However, the company had not identified any possible acquisitions yet.

Companies that have a lot of cash will be able to take this chance to expand into new markets or increase market share at a cheaper price, as asset valuations have plunged across the board and may fall further, said Renee Tai, a consumer-goods analyst at CIMB-GK Securities Pte in Hong Kong.

The global credit crunch has led to financial markets taking a dive, with the MSCI World Index recently losing 20 percent, the most since 1970. Shares of food and commodity-related companies have been hit hard as prices slump for raw materials such as grains, while investors turn away from risky assets.