Tyson Foods intends to divest its Chinese poultry business

According to three people with knowledge of the situation, Tyson Foods, a US meat and processed food company, plans to sell its China chicken business.

According to two of the people, the company has engaged Goldman Sachs to provide advice on the sale and has sent preliminary information to prospective buyers, including a number of private equity firms. They also noted that the sale process is still in its early stages.

While it was not immediately obvious what valuation Tyson Foods is seeking for its China poultry business, one of the people said it has annual sales of roughly $1.1 billion.

Springdale, Arkansas-based Tyson Foods and Goldman Sachs both declined to comment. 

After its third-quarter revenue and profit missed Wall Street expectations, Tyson disclosed this month that it was reviewing its operations and closing four more chicken plants in the United States as part of its latest cost-cutting initiative.

According to analysts, China's meat market has grown more difficult as a result of squeezed farm margins caused by low demand during the COVID-19 pandemic and rising feed costs as a result of the Russia-Ukraine war in the previous two years.

According to bankers, a number of multinational corporations have sold off their operations in China or reduced their holdings in recent years because some of them struggled to make the kind of profits they were hoping for due to the nation's slower economic growth, fierce local competition, or geopolitical challenges.

According to Dealogic statistics, foreign corporations have liquidated a total of $8.4 billion in Chinese assets across all industries this year, following $13.5 billion in disposals in 2022.