Maple Leaf Foods to spin off pork business into new company

Maple Leaf Foods to spin off pork business into new company
Maple Leaf Foods to spin off pork business into new company

Maple Leaf Foods Inc. announced plans Tuesday to spin off its pork division into a new publicly traded company.

Maple Leaf says the deal will allow it to focus more on branded consumer goods.

“As separate companies, Maple Leaf Foods and the new pork business both have promising prospects, a sharper focus on execution with their own dedicated management team and the financial independence to pursue their own value creation strategies,” Maple Leaf CEO Curtis Frank said in a statement.

Under the plan, current Maple Leaf shareholders will receive shares in the new company, while Maple Leaf will retain a 19.9 percent ownership stake.

The two companies also enter into a permanent agreement for the supply of pork.

Maple Leaf said the new pork business will continue to provide Maple Leaf Foods with a secure supply of pork at market prices for its prepared meals division.

Frank will continue to lead Maple Leaf, while the new pork business will be led by Dennis Organ, who joined Maple Leaf Foods in February 2023 as president of the pork complex.

The plan has been approved by the company’s board of directors and is supported by Maple Leaf Foods’ largest and most controlling shareholder, McCain Capital Inc. and the McCain family.

Michael McCain, chairman of Maple Leaf, said it was the right transaction at the right time.

“I am excited about both companies and confident that this transaction has strong potential,” McCain said.

“Our shareholders will be able to participate in not one, but two strong, independent, sustainable and focused companies, each with a clear mandate and investment profile. All our stakeholders will participate in the shared value that we will generate.”

The transaction, which is also subject to shareholder approval, is expected to close in 2025.

This report by The Canadian Press was first published July 9, 2024.

Companies in this story: (TSX:MFI)