Tyson Foods said Wednesday that it has sold its shares, worth about $23 million, in food company Beyond Meat.
Tyson held a 6.6 percent stake in Beyond Meat for over a year. A Tyson spokesman said in an email that the timing was "right to exit its investment."
"Beyond Meat provided an early opportunity for Tyson Ventures to invest in plant-based protein products that many consumers are seeking," the company said. "We wish the leadership of Beyond Meat all the best."
Tyson's exit came shortly after Beyond Meat set the terms of its initial public offering on Monday. The California maker of foods created to look and taste like chicken and beef said it plans to sell as many as 8.75 million shares of common stock valued between $19 and $21 a share, which would raise almost $184 million.
In preparation for that, Beyond Meat filed a notice with the U.S. Securities and Exchange Commission in November, which listed the firm's recent activity and its stakeholders that held more than 5 percent of the company.
According to the filing, Tyson New Ventures LLC, had over 4.7 million shares of common stock, valued at $23,049,996.50.
Tyson Chief Executive Officer Noel White said in February that Tyson would debut its own in-house alternative-protein products in the coming months. Sources told news website Axios that after White's announcement, Beyond Meat began to distance itself from Tyson, despite Tyson's contractual observer rights.
"It's unclear if Beyond Meat asked Tyson to sell its stake, or simply made things so uncomfortable that Tyson decided to make the move on its own," Axios reported.
Beyond Meat did not respond immediately Wednesday to a request for comment.
Reasons to sell a stake in a company vary and can include changes in leadership or recognition that a business segment isn't working, said Alan Ellstrand, associate dean of the Walton College of Business at the University of Arkansas, Fayetteville.
Tyson's shareholder stake gave the company opportunity to get close to Beyond Meat and "decide if this is something [they] really want to get into," Ellstrand said.
Tyson and its competitors have invested in startup companies producing meat-like products that are plant-based and cell-based in a bid to keep up with what is claimed to be is shifting consumer and retail demand.
Tyson likely "felt like they learned what they needed from the relationship with Beyond Meat, then decided to get out," Ellstrand said.
Springdale-based Tyson has said it is committed to capturing alternative-protein market share. The company recently created a business to oversee production.
"We plan to launch an alternative protein product soon with market testing anticipated this summer," the company email said.
Business on 04/25/2019