Brazilian giant JBS, the world's biggest beef producer, agreed to buy a controlling take in bankrupt US poultry producer Pilgrim's Pride in the United States and also acquired at home its Brazilian beef rival Bertin.
Pilgrim's Pride filed for bankruptcy protection in December 2008 due to high feed costs, low chicken prices and heavy debts. It has cut production, closed plants and laid off workers to improve results.
Bertin, founded by the family of that name 30 years ago, is Brazil's No. 2 beef producer with 38 plants in Brazil and abroad. Its takeover will consolidate JBS's position as a global beef player.
As the Brazilian Real currency strengthened against the dollar in recent years, JBS went on an international buying spree, snapping up distressed competitors such as US beef producers Swift Corp in 2007.
The takeover of the United States' second largest poultry producer as well as Bertin's massive beef export platform in Brazil will turn JBS into one of the world's largest, fully integrated meat producer, rivaling US-based Tyson Foods.
In 2005 JBS took its first step abroad buying 85% of beef producer Swift Armour, Argentina's largest beef processor, for US$ 200 million. In 2007 it bought US-based Swift Foods for US$ 225 million and assumed its heavy debt load estimated at more than one billion USD, a few months after going public on the São Paulo Stock Exchange.
Last year JBS bought Australian-based beef producer Tasman Group for US$ 107 million in cash and later US processor Smithfield Beef from Smithfield Foods for US$ 565 million. It also purchased 50% of European beef processor Inalca with plants in Italy, Russia and Africa for US$ 328 million.
This year the Brazilian multinational agreed to buy a 64% stake in the restructured Pilgrim's Pride for US$ 800 million and Brazil's No.2 beef producer after JBS in an all stock deal.
With these acquisitions JBS has a 21% share of the US beef market; 11% of the hog market and 18% of poultry.
Mercopress