Tyson Foods Inc., the largest U.S. meat producer, bought a 5 percent stake in plant-based protein producer Beyond Meat as it expands offerings of prepared foods.
Terms weren't disclosed, the companies said Monday in a statement.Closely held Beyond Meat, based inEl Segundo, California, said the investment will expand its range of products and distribution, and other investors include the Humane Society of the U.S., billionaire Bill Gates and Kleiner Perkins Caufield & Byers. Tyson produces one out of every five pounds of chicken, beef and pork in the U.S.
"We're enthusiastic about this investment, which gives us exposure to a fast-growing segment of the protein market," Monica McGurk, Tyson's executive vice president of strategy and new ventures and president of food service, said in the statement. "It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses."
Tyson has been expanding its range of prepared food and so-called value-added products to boost profit and provide a cushion from the volatility of commodity meat markets. The $8.4 billion acquisition of Hillshire Brands Co. two years ago was part of that effort. Recently, theSpringdale, Arkansas-based company has said branded, international or protein-centric targets would be attractive.
Tyson makes Jimmy Dean sausages and Ball Park hot dogs. It's the largest supplier of pepperoni and pizza toppings to the food-service industry and the second-biggest U.S. maker of flour and corn tortillas and chips. Beyond Meat makes the Beyond Burger, available at some Whole Food Market Inc. stores.
Tyson's shares rose 0.7 percent to $71 at 5:15 a.m. in pre-market trading in New York. They gained 4.1 percent on Monday after an analyst at CLSA said a class-action complaint alleging price collusion among chicken producers was "baseless," and that investors should buy the stock on strong pork and beef margins. On Oct. 7, the preceding trading day, Tyson tumbled 8.9 percent after a Pivotal Research Group analyst said the suit was "powerfully convincing."