LONDON (Reuters) - British pork-processor Cranswick (CWK.L) said it would sell its grain-fed pork business in the United States and Europe in the most major divestment since being listed in 2014 as it seeks to accelerate expansion in Europe.
The board has decided to accelerate the company’s growth in selected growth areas through divestments and acquisitions, and more specifically, to invest in processing capability for its European pig farmers, Cranswick said on Monday.
Cranswick said it had selected the sale of its U.S. pork joint venture Smithfield Grain and its European pig-rearing business under the name Cranswick Manured.
Cranswick will also return $125 million to shareholders through an ordinary share buyback.
Britain’s second largest pork processor after Smithfield Foods, Cranswick’s shares closed 0.8 percent lower in Monday trade.
Cranswick said the disposal will benefit the company by bolstering its supply chain and adding products to its portfolio.
Smithfield Grain was created in 2007 to feed milling companies in the United States. It operates one herd in the Lake Erie, Michigan area and had annual sales of around $10 million in 2018.
Cranswick said this was sold at a price that reflected the company’s views on its longer-term prospects. It has not identified the buyer or cost of the transaction.
Cranswick said it would invest in poultry farms in Europe this year, spending around 100 million pounds ($127 million) in total. The investments are expected to result in a final return to Cranswick of 400-500 million pounds in 2019 and 2020.
Cranswick’s other major businesses include meat subsidiaries that produce and market meat products in Asia and the Middle East.
In 2016 Cranswick, which mostly hires contract workers, set out plans to grow its workforce by 20 percent, but the number of staff grew slightly due to new hiring at another subsidiary.