(Bloomberg) -- South Africa's Public Investment Corp. and black-economic empowerment group Pelo Agricultural Ventures agreed to pay as much as 5.2 billion rand ($365 million) for a majority stake in Karan Beef (Pty) Ltd., which operates the continent's largest cattle feedlot and abattoir.
Founded by the Karan family on their farm in 1974 with fewer than 100 head of cattle, the company now owns a herd of about 150,000 and has also purchased three adjoining farms, an abattoir processing 2,100 cattle daily, and a nearby distribution center. While it mainly supplies the local market, it also has substantial exports, according to an emailed statement from the PIC, which didn't disclose the size of the stake.
Pelo Agricultural Ventures is a black-owned, managed and controlled investment holding company that operates in the agricultural sector in South Africa and the rest of the continent. South Africa's government is pushing businesses to include more black participants to make up for discrimination during apartheid.
Click here to read an earlier story about talks related to the Karan Beef deal
“It will bring new entrants into the sector at ownership level and will be instrumental in bringing emerging farmers into the value chain of beef production in South Africa,” PIC Chief Executive Officer Dan Matjila said in the statement. Pelo will work with Karan's existing management to grow the company, CEO Aobakwe Kukama said.
The PIC manages more than 2 trillion rand on behalf of South African state-workers' pension funds.
To contact the reporters on this story: Hilton Shone in Johannesburg at hshone@bloomberg.net;Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net
To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Renee Bonorchis, Vernon Wessels
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