Australian treasurer Joe Hockey has given the go-ahead for Brazil’s JBS to acquire Australian ham and bacon producer Primo Group in a A$1.45 billion ($1.13 billion; €1.02 billion) deal, according to a statement.
“The Government welcomes foreign investment in Australia and continues to ensure that investments are consistent with Australia’s national interest,” Hockey said in a statement yesterday.
The acquisition, which had been approved by the Australian Competition and Consumer Commission in February, will serve as an exit for Affinity Equity Partners, the pan-Asian private equity firm led by founder KY Tang.
Affinity acquired 70 percent of Primo in 2011 for A$519 million, the balanced retained by the founding Lederer family. Affinity could not be reached for comment by press time.
JBS is the US-subsidiary of the Brazilian meat business JBS S.A., considered one of the largest processor of fresh beef and pork globally.
Primo is Australia’s largest producer of ham and bacon, owning brands such as Primo Smallgoods, Hans and Beehive, and has been pegged for growth in China, local media reported.
China’s food sector has attracted a number of investors tapping into the increased awareness of food safety issues, leading to consumers preferring imported goods from places such as Australia and New Zealand.
Private equity firms including Kohlberg Kravis Roberts, CDH Partners and Olympus Capital have been capitalising on the trend.
Affinity continues to be active in the Australian market, and in August last year acquired a 35 percent stake in Virgin Australia’s Velocity Frequent Flyer programme for A$336 million ($314 million; €238 million) , valuing the entire business unit at A$960 million, Private Equity International reported earlier.