Tyson Foods Inc., the biggest US meat company, is exploring options including a potential sale of its China business, according to people with knowledge of the matter.
The process is at an early stage and some private equity firms have expressed initial interest in the business, the people said, who asked not to be identified as the information is private.
Deliberations are ongoing and Tyson could still decide to keep the asset, the people said. Reuters reported earlier that the meat giant was planning to sell its poultry business and has hired Goldman Sachs Group Inc. to advise.
Tyson has seen profits plummet amid an unusual combination of headwinds across all major protein markets, including a supply glut of chicken and pork. The company has this year moved to shut six chicken plants in the US as part of efforts to streamline operations and boost capacity use.
Read More: Tyson Foods to Shut More US Chicken Plants as Profit Plunges
Tyson established its first factory in China in 2001, and has operations that span breeding, slaughtering, processing and distribution for chicken, cattle and pigs, according to its website. A potential exit from the Asian nation would follow Cargill Inc., which agreed to sell its poultry operations in the country earlier this year to private equity firm DCP Capital.
Meat consumption and production in China have decelerated due to a slowdown in income and population growth as well as issues with animal disease. The country’s output should remain below a 2014 peak at least until 2031, according to a study by the US Department of Agriculture.
A Tyson spokesperson didn’t immediately return emails seeking comment.
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Tyson shares rose as much as 1% in early trading in New York. The stock is down 19% in 2023.
--With assistance from Megan Durisin and Gerson Freitas Jr..
(Updates with context starting in fourth paragraph)
