This agreement includes long term contracts for Hilton Foods Australia (HFA) to supply Woolworths Supermarkets with packaged and value-added meat products.
As part of the deal, Hilton will begin full operational control of the Bunbury and Truganina plants from 1 July 2018.
At the end of a transitional period of two years, Hilton Foods Australia will acquire the relevant plant assets for a book value expected to be AU$85m, for either cash or equity consideration. During this two-year transitional period, HFA will commission a new meat processing plant in Queensland.
It is hoped that this extension to the current partnership between the two companies will enable Hilton to continue to service Woolworths store network under the current long-term 15-year contracts.
The joint venture between Hilton and Woolworths was first announced in January 2013 through a 50% interest in a new company, Woolworths Meats Co Pty, to operate the Bunbury Meat Centre in Bunbury, Western Australia. In August 2013, Hilton further announced that it was to proceed with plans to construct a new meat processing facility in Victoria, Australia. These plants have been operating as part of the Woolworths Meat Co, with all the operating assets currently owned by Woolworths.
In December 2016, Hilton announced plans to construct a new meat processing facility in Queensland, to supply Woolworths. The facility will be owned by Hilton Foods Australia, its 100%-owned Australian operating company. The facility is currently under construction.
Robert Watson OBE, chief executive of Hilton said: "We look forward to welcoming the Woolworths employees in Bunbury and Truganina to our team. We have been working closely with Woolworths for five years and we have a deep understanding and respect for each other. Our long term partnership with Woolworths is growing and this is the next phase of an even stronger relationship. The long term contract between us displays the mutual trust we have in our partnership and Hilton looks forward to working with the Woolworths team to strengthen further our world class meat offer in Australia."
Pat McEntee, Woolworths director of meat, said: "Woolworths is pleased with the value the current joint venture has created within its meat supply chain and is excited to extend the partnership with Hilton to deliver affordable, innovative and convenient protein choices for its customers."