Strategic Split –Canada Packers

Q1. When and where is the Meeting?

A. The Maple Leaf Foods Inc. annual and special meeting of shareholders (the “Meeting”) will take place on Wednesday June 11, 2025, at 9:00 a.m. (ET) at ThinkFood! 6897 Financial Drive, Mississauga, Ontario, Canada. Shareholders have the opportunity to attend the meeting virtually, by a live video webcast at https://meetings.lumiconnect.com/400-337-006-096 or in person at ThinkFood! 6897 Financial Drive, Mississauga, Ontario, Canada.

Q2. Who is entitled to vote at the Meeting and what is the quorum for the Meeting?

A. If you owned shares in Maple Leaf Foods as of close of business on April 23, 2025 (the “Record Date”), you are entitled to attend and vote at the Meeting either in person or online.

The quorum for transaction of business at the Meeting will be at least two (2) persons present in person or represented by proxy holding or representing by proxy not less than one-third (1/3) of the shares entitled to be voted at the Meeting.

Q3. What am I being asked to vote on?

You will be asked to vote on five matters:
1. The election of each of the directors of the Corporation;
2. The appointment of KPMG LLP as the auditors of Maple Leaf Foods;
3. An arrangement resolution authorizing Maple Leaf Foods to proceed with the spin-off of its pork operations to create two independent public companies (the “Arrangement Resolution”);
4. If the Arrangement Resolution is passed, a resolution to approve the Canada Packers Option Plan; and
5. An advisory, non-binding say-on-pay resolution.

Q4. Did Maple Leaf Foods’ Board of Directors recommend shareholders vote FOR the Arrangement Resolution?

A. Yes. The decision to spin-off Maple Leaf Foods’ pork operations as Canada Packers, an independent public company, by way of a plan of arrangement was:
– unanimously recommended by the special committee of the Board, composed entirely of independent directors (the “Special Committee”), which considered, among other things, the fairness opinion provided by RBC Capital Markets, its independent financial advisor, and 
– unanimously approved by the Directors of Maple Leaf Foods entitled to vote on the resolution.
 
The transaction also has the full support of Maple Leaf Foods’ largest shareholder, McCain Capital Inc. and the McCain family.
 
We are also recommending that shareholders vote FOR the other resolutions to be considered at the meeting. As such, the recommendation of the Board is that shareholders:
1. VOTE FOR the election of each of the directors;
2. VOTE FOR the appointment of KPMG LLP as auditors;
3. VOTE FOR the Arrangement Resolution;
4. VOTE FOR the Canada Packers Option Plan resolution; and
5. VOTE FOR the advisory, non-binding say-on-pay resolution.

Q5. What is the required shareholder approval for the Arrangement Resolution?

A. To pass, the Arrangement Resolution needs to be approved by :
– at least 66 2/3% of the votes cast by all shareholders of Maple Leaf Foods; and
– a simple majority of the votes cast by the public shareholders (being all shareholders other than Michael H. McCain, Jonathan W. F. McCain, MCI, Andover Capital Corporation, any other entity controlled by any of such persons, and any person that is an officer or director of any such persons);
in each case present in person or represented by proxy at the Meeting.

Q6. What is the Transaction and what am I approving if I vote for the Arrangement Resolution?

A. Maple Leaf Foods is advancing a plan to unlock significant value by separating into two independent public companies, each primed for growth and positioned to be a leader in its field through the spin out of its pork operations by way of a Plan of Arrangement (the “Transaction”). Upon completion of the Transaction: 
 
– Maple Leaf Foods will enter a bold new chapter as a focused, purpose-driven and protein-centric consumer packaged goods company, uniquely positioned to meet the world’s growing demand for sustainable protein. Guided by a clear Strategic Blueprint and an ambitious vision to be the Most Sustainable Protein Company on Earth, we are poised to unlock our full potential. We are harnessing the strength of our category-leading brands, accelerating innovation that resonates with today’s consumers, scaling our leadership in sustainable meats, and extending our reach into high-growth geographies, channels, and categories. With an unrelenting focus on operational excellence and a deeply rooted, values-driven culture, Maple Leaf Foods is building a resilient, future-ready business that delivers meaningful, long-term value for all stakeholders.
 
– Canada Packers will go forward as a global leader in sustainably produced, premium quality, value-added pork products, built on a legacy of excellence and innovation. Canada Packers is well positioned to unlock the significant growth potential of its business by investing in low-risk high return opportunities, including increasing volumes, optimizing operations and efficiencies, and building on its favourable sales mix and margins. Canada Packers will be among North America’s largest producers of Raised Without Antibiotics (“RWA”) pork and a key supplier of RWA and conventional pork products to customers in Canada, the U.S., Japan, China and other international markets.

The creation of two independent public companies is expected to unlock value for stakeholders and unleash potential for each of the two companies as they pursue distinctive value creation opportunities with a sharper focus on the execution of their respective growth strategies.
 

Q7. What is the strategic rationale for spinning off Maple Leaf Foods’ pork business?

A. Maple Leaf Foods’ Board and the Special Committee, acting with the advice and assistance of their respective financial, legal and tax advisors, have, together with management, carefully evaluated the proposed spin-off and believe it is in the best interests of Maple Leaf Foods, fair to the public shareholders and the most attractive value creation opportunity available. Among the many expected benefits include:
 
– Enhanced Strategic Focus
Separating into two distinct businesses, each with unique investor theses, Maple Leaf Foods and Canada Packers will be set up to execute on and de-risk their respective growth plans.

Maple Leaf Foods believes there is currently untapped value creation potential in its pork operations that cannot be fully unlocked in the context of the current integrated corporate structure which is primarily focused on building its consumer-packaged goods operations.

As a stand-alone company, Canada Packers will focus on optimizing its operations and will be positioned to pursue its significant opportunities in key global markets, including leveraging its ability to appeal to niche, premium and specialty markets. At the same time, Maple Leaf Foods will be able to focus its attention on growing its Prepared Foods operations in North America, building on the strength of its brands and delivering cost-effective operational excellence, all while continuing to execute its sustainable meats strategy.
 
– Distinct Investment Propositions to Unlock Shareholder Value
Maple Leaf Foods believes its trading multiple is currently misaligned with the underlying value of its portfolio mix, and that this transaction creates an opportunity to capture a higher sum-of-the-parts value over time as investors will have increased visibility into each business and their respective value propositions and growth strategies.
 
– More Focused Investments for Shareholders
Completing the spin-off will allow shareholders to retain similar economic exposure to the status quo but through two more focused investment opportunities, with Maple Leaf Foods focused on delivering results as a market-leading, branded protein consumer packaged goods company, and Canada Packers as an integrated, value-added pork company with a diversified sales mix and global reach.
 
– Mutually Optimized Supply Chain Opportunities
By entering into an evergreen supply agreement with Canada Packers as part of the separation, Maple Leaf Foods will have access to a stable supply of the particular cuts of sustainably produced, quality pork it requires for its Prepared Foods operations.

Canada Packers will benefit from having Maple Leaf Foods as its anchor North American customer, while being able to optimize the entire hog through its global sales strategy and integrated business model.
 
As separate companies, Maple Leaf Foods and Canada Packers each will have focused growth prospects, a sharpened execution focus with their respective dedicated management teams, and the financial independence to pursue their own value creation strategies, all with an enduring commitment to safety and sustainability.
 
For more information on these and other reasons for the spin-off, please refer to the Management Information Circular.

Q8. Why is Maple Leaf Foods spinning off its
Pork Operations now?

A. We believe the Transaction creates an opportunity to capture a higher sum-of-the-parts value over time, providing investors with greater clarity into each business’ value proposition and growth strategy.

The Transaction will create significant and compelling value by building on the momentum in the businesses to deliver:
– Two clear and compelling investment opportunities, each with a distinct value proposition and growth strategy.
– Sharpened focus and execution from dedicated management teams.
– Continuing leading sustainability practices and enduring commitments to continue to lead in sustainability in both companies.   
 
We believe the rationale is now even more compelling than when it was announced. With pork markets improving, and consumer sentiment stabilizing, we believe we are even better positioned to create value for stakeholders through the Transaction than when it was first announced.

Q9. What percentage of Canada Packers will Maple Leaf Foods own following completion of the Transaction?

A. Maple Leaf Foods will retain a 16% ownership position in Canada Packers. Immediately upon closing of the Transaction, shareholders as of the distribution record date will hold all of the outstanding Maple Leaf Foods common shares and 84% of the Canada Packers common shares (with Maple Leaf Foods retaining a 16% ownership position in Canada Packers).

Q10. Why is Maple Leaf retaining 16% of Canada Packers?

A. The 16% retained interest is to retain a relationship beyond purely supplier-purchaser, given the strategic nature of the ongoing customer/supplier relationship. We believe the retained ownership aligns interests and shows Maple Leaf’s support for and confidence in Canada Packers.

Q11. How will the Transaction be structured?

Highlights of the Transaction structure are:
– The Transaction is being structured as a tax-free “butterfly” by way of a Plan of Arrangement
– We are seeking an Advance Tax Ruling from the CRA to confirm that that steps to complete the Transaction meet the “butterfly” rules
– Maple Leaf Foods has applied to list on the TSX the Canada Packers shares under a newly created stock symbol CPKR
– Maple Leaf Foods shares will continue to trade under the stock symbol MFI
– At Transaction close, each Maple Leaf Foods shareholder as of the distribution record date is expected to hold 0.2 Canada Packers common shares and 1 new Maple Leaf Foods common share for each Maple Leaf Foods common share that they owned before.
– As a result, immediately upon closing, shareholders as of the distribution record date will hold all of the outstanding Maple Leaf Foods common shares and 84% of the Canada Packers common shares, with Maple Leaf Foods retaining a 16% ownership position in Canada Packers.

Q12. What are the next steps in the separation process?

A. Work is well underway to separate Maple Leaf Foods into two companies, including finalization of all the Transaction documents and defining the organizational structures that will carry the two companies forward. This work is being managed by the Separation Management Program team. 
 
As of May 1, the Company has entered into a number of agreements to advance the Transaction, including: the Arrangement Agreement which, among other things, provides for the steps to effect the transaction; the tax matters agreement with Michael H. McCain, McCain Capital Inc. (“MCI”) and Jonathan W.F. McCain (the “McCain Parties”) which contains a number of covenants and representations related to compliance with the “butterfly” rules; and voting support agreements pursuant to which each McCain Party has agreed to vote in favour of the special resolution to approve the transaction on the terms set out therein.
 
Next steps include:
– Finalize the remaining closing agreements, including the Supply Agreement, the Separation Agreement and the credit agreements for each of Canada Packers and Maple Leaf Foods
– Secure shareholder approval for the Transaction at the Shareholder Meeting on June 11, 2025
– Receive the Advance Tax Ruling from the CRA
– List the Canada Packers shares on the TSX
 
Assuming all goes as planned, Canada Packers is expected to be spun off as an independent, publicly traded company in the back half of 2025.
 

Q13. Can you provide details about the Canada Packers Governance Agreement?

A. The Canada Packers Governance Agreement was negotiated at arm’s length by the Special Committee and MCI. The following summary of the material terms:
– Canada Packers will have a majority independent board of directors.
– MCI has the right to nominate up to two directors, and Maple Leaf Foods has the right to nominate up to one director
– MCI and Maple Leaf each have certain consent rights including with respect to changing the size of Canada Packers’ Board and termination of Canada Packers’ CEO
– In addition, MCI has certain rights to be consulted including with respect to amalgamations, merger arrangements, reorganizations, acquisitions of property in excess of $25 million, incurrence of indebtedness over $25 million or amending Canada Packers’ business purpose
– The Canada Packers Governance Agreement is required to be approved every three years by (i) the shareholders of Canada Packers (other than MCI and Maple Leaf Foods), and (ii) MCI. If either of these groups does not ratify, the Governance Agreement will terminate
– The McCain Holders and Maple Leaf Foods have agreed not to transfer or sell any Canada Packers’ Common Shares for a period of 24 months following the closing of the Arrangement (subject to certain customary exceptions).

Q14. Who has agreed to support the Arrangement?

A. Maple Leaf Foods and the McCain Parties have entered into voting support agreements pursuant to which, among other things, each McCain Party has agreed, on the terms set out in the voting support agreements, to vote or cause to be voted the Maple Leaf Foods common shares owned, directly or indirectly, by each such McCain Party in favour of the Arrangement Resolution to approve the transaction at the Meeting. The McCain Parties currently collectively own an aggregate of 49,088,794 Maple Leaf Foods common shares, representing approximately 39.60% of the outstanding shares.

Q15. Where will the shares for Canada Packers and Maple Leaf Foods trade?

A. Maple Leaf Foods has applied to list on the TSX the Canada Packers shares under a newly created stock symbol “CPKR.” Following the Arrangement, Maple Leaf Foods shares will continue to trade under the stock symbol “MFI.”

Q16. What are the tax implications to Maple Leaf Foods of this transaction?

A. Under the “butterfly” structure, the transaction is expected to be completed on a tax-free basis for Maple Leaf Foods. We have submitted an advance tax ruling to the CRA seeking confirmation that our structure aligns with the “butterfly” rules.

Q17. What dividends will I receive from Maple Leaf Foods? What is the dividend policy and dividend I will receive from Canada Packers?

A. Maple Leaf Foods’ general practice has been to pay quarterly cash dividends on its common shares. Typically, these dividends are payable on the last business day of the month to Shareholders as of the record date established by the Board.

It is currently anticipated that the combined aggregate initial quarterly dividends of Maple Leaf Foods and Canada Packers immediately following the completion of the Arrangement will not be less than the amount of Maple Leaf Foods’ aggregate quarterly dividend immediately prior to the completion of the Arrangement.

Future dividends will be at the discretion of each company’s board of directors.

Q18. When do you expect the separation to be complete?

A. The separation is expected to be complete in the back half of 2025, assuming Shareholder approval on June 11, 2025 at our Annual and Special Meeting, and a timely satisfaction of the other closing conditions, such as securing our CRA ruling.

Q19. How can I vote?

A. Voting in advance: Both registered and beneficial shareholders can vote by proxy in advance of the Meeting in any one of three ways:


Registered Shareholders
If your securities are held in your name and represented by a physical certificate or DRS statement.

Internet – Go to www.investorvote.com. Enter the 15-digit control number printed on the form of proxy and follow the instructions on screen.

Telephone or Fax – Call Computershare Trust Company of Canada at 1-866-732-VOTE (8683) and follow the instructions. You will need the 15-digit control number printed on the form of proxy to vote.

Mail – Complete, date and sign the form of proxy and return it in the enclosed postage paid envelope to: 
Computershare Investor Services Inc.
100 University Avenue, 8th Floor,
Toronto, Ontario, M5J 2Y1

Beneficial (Non-Registered) Shareholders
If your shares are held with a broker, bank or other intermediary.

Internet – Go to www.proxyvote.com. Enter the control number printed on the VIF and follow the instructions on the screen.

Telephone or Fax – Complete, date, and sign the VIF and fax it to the number listed on the VIF.

Mail – Enter your voting instructions, sign and date the VIF, and return the completed VIF in the enclosed postage paid envelope



If you vote in advance, your vote must be received before the proxy cut-off time for it to be counted at the meeting:

– As a registered Shareholder you must submit your proxy so that it is received by Computershare Trust Company of Canada by no later than 9:00 a.m. (Eastern time) on June 9, 2025 (or, if the Meeting is adjourned or postponed, at least 48 hours (excluding Saturdays and holidays) prior to the commencement of the reconvened meeting).
– As a beneficial Shareholder you must submit your voting instructions before the deadline set by the brokers or intermediaries as specified in the voting instruction form, which may be earlier than the proxy cut-off time set out in the management information circular. You should contact your broker or intermediary for further details.

Q20. What if I have other questions?

A. If you have further questions or require assistance with voting your shares, please contact Maple Leaf Foods shareholder communications advisor and proxy solicitation agent, Laurel Hill Advisory Group, by phone at 1-877-452-7184 (toll-free in North America), or 1-416-304-0211 (outside of North America) or by email at assistance@laurelhill.com.