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Tyson Foods Sells Cold Storage Warehouses to Lineage Inc.

Cold storage warehouse for food production

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News Summary

In a strategic move to enhance its financial position, Tyson Foods has announced the sale of four cold storage warehouses to Lineage Inc. for $247 million. Located across various states, the warehouses total approximately 49 million cubic feet of storage space, facilitating a workforce transition of about 1,000 employees to Lineage. This divestiture aligns with Tyson’s commitment to operational excellence and is coupled with a positive fiscal report projecting significant income and cash flow for the upcoming fiscal year.

Springdale, Arkansas – Tyson Foods Inc., a leading player in the food production industry and publicly traded under the ticker symbol NYSE: TSN, has announced plans to sell four of its cold storage warehouses to Lineage Inc. in a transaction valued at $247 million. This strategic move is part of Tyson’s ongoing efforts to bolster its operational excellence and strengthen its financial position.

The warehouses included in this deal are located in Pottsville, Pennsylvania; Olathe, Kansas; Rochelle, Illinois; and Tolleson, Arizona. Collectively, these facilities encompass about 49 million cubic feet of cold storage space. As a result of this acquisition, approximately 1,000 employees from Tyson Foods will transition to Lineage, which is based in Novi, Michigan and operates as a real estate investment trust.

This sale was announced alongside Tyson Foods’ fiscal report highlighting solid performance in sales and operating income across its various business segments, which include beef, pork, chicken, and prepared foods. Donnie King, the President and CEO of Tyson Foods, emphasized the company’s commitment to enhancing its financial strength while achieving operational excellence.

Looking ahead, the USDA forecasts a modest 1% increase in domestic protein production driven primarily by the beef, pork, chicken, and turkey sectors. For fiscal 2025, Tyson Foods anticipates an adjusted operating income ranging between $1.9 billion and $2.3 billion, with capital expenditures projected between $1.0 billion and $1.2 billion. The company also expects to generate a free cash flow of $1.0 billion to $1.6 billion in the same period.

The anticipated adjusted effective tax rate for fiscal 2025 is approximated at 25%, reflecting a cautious approach to some of the market’s challenges and uncertainties. Tyson Foods, which has been operational since 1935, employs around 138,000 people as of September 28, 2024, and boasts a wide array of recognized brands within the food and beverage sector.

This divestiture marks a significant step for Tyson Foods as it seeks to streamline its operations and focus on core business areas while ensuring that their workforce is transitioned effectively into the new ownership under Lineage Inc.

In conclusion, this transaction is indicative of a changing landscape within the food production and storage industry, where operational efficiency and financial performance remain crucial for sustaining growth and competitiveness.