SOUTH AFRICA – The South African state owned entity, Public Investment Corp. and black-owned investment firm Pelo Agricultural Ventures have acquired a majority stake in Karan Beef, which operates the largest cattle feedlot and abattoir on the continent, reports IOL Business.
According to Pelo Agricultural Ventures CEO, Aobakwe Kukama, Pelo will work with Karan’s existing management to grow the company.
“We are extremely proud to be part of this ground-breaking transaction and looking forward to working closely with the existing management team to grow the company,” he said.
Talks about the buyout surfaced in June this year indicating that the management of Karan Beef had approached the Public Investment Corp to assist it with funding for a planned acquisition.
PIC said that the company processes 2,040 head of cattle daily and debones up to 300 tonnes of meat a day and South Africa is its biggest market, with significant exports to UAE, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Mauritius, Seychelles, Maldives, China and Hong Kong.
The firm owns a herd of about 150,000 and has also purchased three adjoining farms, an abattoir and a nearby distribution center.
In September, the company paid a fine of US$190,354.00 after the Competition Commission found that the company had divided the beef market by allocating customers and specific types of goods in contravention of the Competition Act.
Making up for apartheid
The deal which awaits approval by South Africa’s competition authorities, will ensure the company is locally-owned, under black control.
Bloomberg reports that the South African government is pushing to bring more ownership of businesses into the hands of black South Africans to make up for racial inequality related to the white-minority rule.
“This is a historic deal, concluded in terms of our client’s developmental investment mandate, which will support the much-needed transformation in the agricultural sector.
It will bring new entrants into the sector at ownership level and will be instrumental in bringing emerging farmers into the value chain of beef production in SA,” said PIC CEO, Daniel Matjila.
“We are, particularly, happy that the Karan family has decided to sell part of this important asset to South Africans, ensuring that ownership remains local and in black control.
This is a significant transaction and must be celebrated.”
Speaking on the transaction, Ivor Karan said: “This is a ground-breaking deal for agriculture in SA and we must celebrate the fact that the company will remain South African.
We look forward to taking our new partners under our wings and sharing 45 years of knowledge and expertise with them.”