Maple Leaf Foods Inc. says it plans to spin off its pork business into a new publicly traded company.
With the deal, Maple Leaf said it will be a more focused brand-led consumer packaged goods company.
“As separate companies, Maple Leaf Foods and the new pork company will each have exciting prospects, a sharpened execution focus with its own dedicated management team, and the financial independence to pursue its own value creation strategy,” Maple Leaf chief executive Curtis Frank said in a statement.
Under the plan, existing Maple Leaf shareholders will receive shares in the new company, while Maple Leaf will keep a 19.9 per cent ownership position.
The two companies will also enter into an evergreen pork supply agreement.
Maple Leaf said the new pork company will continue to provide Maple Leaf Foods with a secure supply of pork at market prices for its prepared foods business.
Maple Leaf will continue to be led by Frank, while the new pork company will be led by Dennis Organ, who joined Maple Leaf Foods in February 2023 as president, pork complex.
The plan has been approved by the company’s board of directors and has the support of Maple Leaf Foods’ largest and controlling shareholder, McCain Capital Inc. and the McCain family.
Maple Leaf executive chair Michael McCain said it was the right transaction at the right time.
“I am passionate about both of these businesses and have absolute confidence in the powerful potential of this transaction,” McCain said.
“Our shareholders will be able to participate in not one, but two strong, independent, sustainable and purpose-driven businesses, each with a clear mandate and investment profile, and all our stakeholders will participate in the shared value we will generate.”
The transaction, which is also subject to shareholder approval, is expected to be completed in 2025.
This report by The Canadian Press was first published July 9, 2024