CPF Invests ฿11.8bln. to Acquire “HyLife”, Becoming the Leading Pork Producer in Canada
CPF has invested ฿11.8 billion to acquire “HyLife” to become the leading pork producer in Canada and the opportunity to expand in the North American region.
Charoen Pokphand Foods Public Company Limited (CPF) has informed the Stock Exchange of Thailand and its shareholders of the investment in HyLife Investments Ltd. (HIL) and the acquisition of remaining shares in Charoen Pokphand Foods Canada Inc. in Canada and the investment in AHM Lifestyles – Creative Hospitality Co., Ltd. in Vietnam by subsidiaries.
The acquisition of HyLife Investments Ltd.
CPF Canada Holdings Corp., an indirect subsidiary of CPF, signed the Share Purchase Agreement (SPA) to acquire a 100% interest in HyLife Investments Ltd. (HIL), which owns a 50.1% interest in HyLife Group Holdings Ltd. (HyLife) on April 20, 2019. for a total consideration of CAD 498 million or approximately THB 11,845 million.
The Acquisition is expected to be completed within 8 months from the execution of the SPA, subject to fulfillment of the conditions precedent specified in the SPA. Following the acquisition, CPF Canada Holdings Corp. and HIL, the two subsidiaries of CPF, will be amalgamated, resulting in a new entity which will assume the name CPF Canada Holdings Corp., under the laws of British Columbia.
The acquisition of HIL is expected to generate the following benefits to CPF:
1) As a leading integrated pork producer in Canada, HyLife will give CPF access to a cost-efficient and strong biosecurity pork production base, together with future opportunity to expand in the North American region.
2) The acquisition of HyLife will enhance CPF in penetrating into premium markets in strategic countries such as Japan.
3) Opportunities for CPF to exchange technical know-how and best practices with HyLife in various areas including feed formulation, genetics improvement, hog farming technique and management and processing techniques.
4) By combining the strengths of both HyLife and CPF, multiple synergetic opportunities are expected to realize: (1) expansion of HyLife’s product portfolio into cooked and value-added pork products by leveraging CPF’s expertise in the segment; and (2) opportunities for HyLife to leverage on CPF’s connections, customer base and distribution network in China and the US as a platform to further penetrate the markets and expand HyLife’s sale volume in the countries.
The acquisition of the remaining shares of CPF Canada
CPF Investment Ltd. (CPFI), the wholly owned subsidiary of CPF, entered into share sale and purchase agreements to acquire the remaining shares in Charoen Pokphand Foods Canada Inc. (CPF Canada), which engaging in import and export food products, from the existing shareholders of the aforementioned subsidiary an the amount of 300,000 shares (equivalent to 30% of total issued and paid-up shares of CPF Canada) with the transaction value of CAD 300,000 or approximately THB 7.1 million. After the completion of the above transactions, CPF Group will hold 100.00% in CPF Canada.
The acquisition of AHM Lifestyles
C.P. Vietnam Corporation (CPV), an indirect subsidiary of CPF entered into a sale and purchase agreements to acquire 70% stake in AHM Lifestyles – Creative Hospitality Co., Ltd. (AHM), company registered in Vietnam, from the sellers with the transaction value of VND 24,150 million or approximately THB 33.3 million. After the completion of the transactions, AHM will become an indirect subsidiary of CPF.