OTLY - Oatly sets up manufacturing partnership with Ya Ya foods as part of asset-light strategy

Oatly Group AB ( NASDAQ: OTLY ) pushed higher in early trading on Monday after the company announced a long-term strategic hybrid partnership in North America with Ya YA Foods Corporation.

As part of the hybrid partnership, Oatly ( OTLY ) will continue to produce its proprietary oat base at both the Ogden, Utah and Fort Worth, Texas facilities, which will then be transferred to Ya YA Foods to be co-packed into Oatly products on-site at each location. In addition, Ya YA Foods will acquire a majority of the assets used in the operation and assume the property lease at Oatly’s production facility in Ogden, as well as assume responsibility for the completion of construction of the production facility and the lease in Fort Worth. Oatly ( OTLY ) will retain full ownership and operation of proprietary oat base production lines in each facility.

Under the terms of the deal, Oatly ( OTLY ) will receive approximately $72M, plus an additional credit amount towards future use of shared assets related to the Ogden facility. Oatly will also receive an additional credit towards ongoing construction at the Fort Worth location.

The transaction is expected to close in Q1 of 2023.

The deal is part of Oatly ( OTLY ) shift towards an asset-light supply chain strategy to expand its hybrid production network globally to better support its growth, capacity needs and product and format innovations.

Shares of Oatly ( OTLY ) rose 2.01% in premarket action on Monday after falling 78% in 2022. See the advanced trading chart.

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