## Tiger Brands Takes a Bold Step: Selling Langeberg & Ashton Foods for R1
In a striking move that has captured the attention of the food industry, **Tiger Brands** has announced the sale of **Langeberg & Ashton Foods (LAF)** to a consortium of local fruit producers and partners for a mere **R1**. This decision stems from challenges in determining LAF’s long-term commercial viability and sustainability.
### A Responsible Exit
In a recent **SENS update**, Tiger Brands emphasized the extensive efforts made to ensure a **responsible exit** from LAF, acknowledging the economic significance of this **iconic business** in the region. With **over 3,000** permanent and seasonal employees, the implications of this sale extend beyond mere numbers — it affects the livelihoods of many families.
For further insights, check the full announcement on [Moneyweb](https://www.moneyweb.co.za/mny_sens/tiger-brands-limited-voluntary-announcement-regarding-the-sale-of-langeberg-and-ashton-foods-business/).
### Who’s Behind the Consortium?
The consortium includes local stakeholders deeply invested in the **sustainability of LAF** and a cooperative of fruit growers from the **Ashton region** in the **Western Cape**. Together, they bring vital **agricultural expertise** and insights to the table, ensuring a strong foundation for the future of the business.
#### The Ashton Fruit Producers Co-operative
This cooperative encompasses producers from notable areas such as **Robertson**, **Ceres**, **Breede River**, and the **Klein Karoo**. Their involvement is expected to enhance LAF’s ability to thrive in a competitive market.
### Understanding the Transaction
This groundbreaking transaction involves **Tiger Consumer Brands**, a subsidiary of Tiger Brands, selling LAF as a **going concern**. Though the sale price is nominal at **R1**, this includes a commitment of **R150 million** to establish a **community trust** aimed at socioeconomic development in the broader **Langeberg area**. This trust will also secure a **10% stake** in LAF through the newly formed company, while the consortium retains the majority equity.
As part of its ongoing contributions, Tiger Brands is also investing **R31 million** towards upgrading an **effluent plant**, reinforcing its commitment to responsible business practices.
### Aligning with Strategic Goals
This move aligns seamlessly with Tiger Brands’s strategy to focus on core markets and solidify its position as Southern Africa’s leading consumer goods company. By stepping back from LAF, which primarily exports products to **Europe** and **Asia**, Tiger Brands can redirect valuable resources and concentrate on its strategic objectives.
#### The Financial Implications
The seasonal nature of LAF’s operations demands significant working capital — approximately **R900 million annually**. Exiting the business will free up resources, thus improving Tiger Brands’s cash flow and enhancing overall financial efficiency.
### Regulatory Oversight
It is important to note that this transaction is subject to regulatory approval from competition authorities. One of the key conditions set by Tiger Brands requires a **contract manufacturing agreement** to ensure ongoing supply of canned fruit under the well-known **KOO brand** to the Southern African markets.
For related updates, read about Tiger Brands’s latest progress in their [listeriosis case](https://www.moneyweb.co.za/news/companies-and-deals/tiger-brands-tables-settlement-in-listeriosis-case/).
### Future Outlook: Trading Update for H1 2025
This week, Tiger Brands released a **trading update** showcasing anticipated **headline earnings per share (Heps)** for total operations expected to rise between **15% and 25%** for the six months ending March 31, 2025. Notably, Heps from continuing operations are forecasted to be **30% to 40%** higher compared to the same period in 2024.
The company will unveil its **interim results** for this period on or around **May 28**.
For ongoing financial insights, follow Moneyweb’s comprehensive coverage on business news via their [WhatsApp channel](https://whatsapp.com/channel/0029Vak1qsQDuMRlZuYnnF11).
