<article>Japanese general trading conglomerate <a style="color: #000080;" href="http://dealstreetasia.com/tag/marubeni-corp" target="_blank" rel="noopener noreferrer">Marubeni Corp.</a> has acquired US-based beef and pork supplier Creekstone Farms Premium Beef from Sun Capital Partners.</article>

Japanese general trading conglomerate <a style="color: #000080;" href="http://dealstreetasia.com/tag/marubeni-corp" target="_blank" rel="noopener noreferrer">Marubeni Corp.</a> has acquired US-based beef and pork supplier Creekstone Farms Premium Beef from Sun Capital Partners.
While financial terms of the deal are undisclosed, the transaction size was <a style="color: #000080;" href="http://-%20Marubeni has added a U.S. beef processor to its portfolio, anticipating greater exports to China after Beijing lifted a long-standing ban on meat from American cattle in June. The Japanese trading house on Tuesday acquired all of Kansas-based Creekstone Farms, a distributor of premium beef, in a deal worth about $170 million, including liabilities. With the resumption of American beef exports to China, Marubeni expects the country's appetite for the meat to grow as its middle class expands. Creekstone, which recorded $550 million in sales last year, processes beef for sale to supermarkets and restaurants. It is the 12th biggest U.S. beef producer by volume and among the top processors of premium beef. In 2016, Creekstone processed about 250,000 head of cattle, with about 80% of the beef going to U.S. consumers and the rest shipped to Europe, Japan and other countries. The U.S. company got its license to export to China soon after the beef ban was lifted last month. Marubeni will aim for sales of $620 million at Creekstone in 2020 by increasing exports to China and other emerging markets. Marubeni has been exporting American beef to Japan for over 40 years. In 1988, it purchased Australian feedlot operator Rangers Valley, which currently ships 40,000 head of cattle annually and sells beef in Australia, Japan, China, South Korea, Europe and the Middle East. Marubeni will use these sales channels to expand Creekstone's exports. Worldwide beef consumption reached 68.3 million tons in 2016 and is projected to increase by over 10% to 76 million tons this year, thanks partly to population growth in emerging markets, according to the Organization for Economic Cooperation and Development and other sources. China's decision to lift the beef ban, which had been in place since 2003 following U.S. outbreak of mad cow disease, came on the heels of an agreement in May with the administration of President Donald Trump on a 100-day plan to correct trade imbalances. Marubeni sees changes in trade policy among major economies as business opportunities. Fellow trading house Itochu invested in Canadian pork producer HyLife Group Holdings in 2013, and now imports its meat to Japan. If the Trans-Pacific Partnership enters into force and import tariffs fall, that may provide a tailwind for sales of pork from Canada." target="_blank" rel="noopener noreferrer">reported</a> by the Nikkei Asian Review to be around $170 million, including debt.
The rationale for the transaction is in anticipation of greater exports to China, following the lift of a ban on US cattle by Beijing in June. Marubeni expects the appetite for premium US beef to grow as China&#8217;s middle class expands.
In an official statement, Marubeni said, “with the acquisition of C.S.F., in addition to its existing subsidiary Rangers Valley, which engages in cattle feeding and beef distribution in Australia, Marubeni will secure its production base in the two largest beef-producing countries and establishes its organisation to meet the globally-growing need for high-quality beef.&#8221;
Sun Capital first acquired Kansas-based Creekstone Farms in February 2005 through an affiliate and undertook a range of improvements to transform the business during its ownership period. According to Sun Capital, it grew the company’s line of all natural products from less than 5 per cent of production at acquisition to roughly 22 per cent at present and expanded international business more than 800 per cent to approximately 20 per cent of total sales.
Creekstone recorded $550 million in sales for 2016. The firm supplies Black Angus Beef, antibiotic-free Duroc Pork and other value-added products to grocers and restaurants in the US and is the twelfth largest US beef producer by volume.
It is among the category leaders in premium beef, processing about 250,000 head of cattle in 2016. This saw 80 per cent of its beef going to US consumers, with the rest shipped to Japan, Europe, Latin America and other regions.
Marubeni aims to grow sales to $620 million by 2020, with a focus on exports to China and other emerging markets.
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Japanese general trader Marubeni Corporation acquires beef supplier Creekstone Farms in a deal reported to be worth $170m.

Japan: Marubeni Corp acquires Creekstone Farms from Sun Capital

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Japan: Marubeni Corp acquires Creekstone Farms from Sun Capital

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