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US meat giant Tyson Foods is reportedly exploring plans to sell off its China poultry business in the latest case of a multinational fmcg firm looking to sell key assets in the country.

A report from Bloomberg says the company has hired Goldman Sachs to advise on the sale and sent preliminary information to potential buyers including a number of private equity firms.

It said the assets for sales generate $1.1bn of annual sales, but did not put a valuation on the business.

Tyson had previous said earlier this month it was evaluating all operations and closing four US chicken plants to reduce costs after weaker than expected third-quarter revenue and profit performance.

Bloomberg notes that China’s meat market has become “increasingly challenging”, with livestock farm margins squeezed in the last two years due to weak demand during the COVID-19 pandemic and increased feed prices because of the Russia-Ukraine war.

If Tyson does exit its China business, it will become the latest in a line of major fmcg businesses to scale down operations in the country.

Bloomberg notes US agricultural player Cargill sold its China poultry business to private equity firm DCP Capital in May, while Reckitt Benckiser sold its China infant formula and child nutrition business to investment firm Primavera Capital Group in 2021 and Dutch dairy cooperative FrieslandCampina is seeking a sale of its Friso infant nutrition business.

The report said Tyson Foods and Goldman Sachs declined to comment.

Morning update

On a quiet morning in the City, sustainable food investor Agronomics has announced that Shanghai based portfolio company CellX has inaugurated China’s first cultivated meat pilot factory, setting the stage for an anticipated commercial launch by 2025.

The completion of the large-scale facility, Future Food Factory X, follows a successful US$6.5m Series A+ financing announced in June 2023.

Having introduced its cell-cultured pork to samplers back in 2021, CellX is in the process of applying for regulatory approval in both Singapore and the US, with the aim to launch by 2025.

As China’s first “transparent food space” for cultivated meat, CellX integrates technology research and development, pilot production, and interactive consumer experiences at the new facility. Consumers are now able to sample products made from cultivated meat at the plant.

CellX will look to target the high-end market, with further plans to introduce mass-market products as it continues to scale up and reduce costs in the future. The materially lower cost of bioreactors compared to the US and Europe, combined with the Chinese government’s incentives for cultivated meat as part of its five-year plan, is expected to contribute to the efforts to lower prices.

Agronomics has invested a total of US$2.05m in CellX since its inception in 2020 and has an equity ownership of 4.98% on a fully diluted basis.

On the markets this morning, the FTSE 100 is down 0.5% to 7,320pts.

Risers include Glanbia, up 4.9% to €14.89, Naked Wines, up 2.2% to 73.6p and Hotel Chocolat, up 0.9% to 112p.

Fallers include Imperial Brands, down 1.8% to 1,745.7p, Ocado, down 1.6% to 799.2p and Greggs, down 1.5% to 2,512p.

Yesterday in the City

The FTSE 100 was down 0.4% to 7,356.9pts yesterday.

Fallers included Wynnstay, down 5.6% to 425p, Deliveroo, down 3.2% to 119.8p, C&C Group, down 2.4% to 137.6p and Just Eat, down 2% to 1,157p.

The day’s risers included

Marks & Spencer again, rising another 4.5% to a new annual high of 231.6p and approaching four-year highs.

Other risers included B&M European Value Retail, up 1.7% to 574.8p, Ocado, up 1.6% to 812.4p, Associated British Foods, up 1.2% to 1,991p and Naked Wines, up 1.2% to 72p.