JBS, the Brazilian meat company whose former chairman was arrested over the weekend, has agreed to sell poultry producer Moy Park to another subsidiary for about $1bn (€832m).
Moy Park, which employs 6,300 people at plants in Craigavon, Co Armagh, Dungannon Co Tyrone, and Ballymena, Co Antrim, also has operations in the Republic, France and the Netherlands. It processes 5.7 million chickens a week.
The deal will achieve about $50m in annual cost savings over the next two years, according to the acquirer, Pilgrim’s Pride.
The second-largest US chicken producer will finance the takeover using cash on hand, existing credit facilities and a seller financing note issued to JBS, which Pilgrim’s says it intends to replace with permanent financing. JBS, which holds 79% of Pilgrim’s Pride shares, bought the Moy Park business in 2015 for about $1.5bn, including debt. Pilgrim’s said the enterprise value of the Moy Park deal is about $1.3bn.
JBS will use the proceeds from the Moy Park sale to reduce its short-term debt in Brazil, it said. The meatpacker said the deal maintains JBS’ diversified product portfolio and will further support its intention to seek a public listing in the US.
The company also said the deal was approved by independent members representing minority shareholders in a special committee that was delegated full authority from Pilgrim’s board to analyse, negotiate and approve the transaction.
The acquisition also gives Pilgrim’s growth opportunities in Europe, with access to an additional 300 million consumers and to local chicken production in Ireland and the UK.
The deal doesn’t need further approval by the Brazilian court or competition authorities in the UK, according Pilgrim’s executives. Batista Brothers Joesley and Wesley Batista, the scandal-hit Brazilian brothers whose family controls JBS, have been shedding assets to help pay for legal settlements after they confessed to graft and other crimes that allowed them to carry out a massive acquisition spree in Latin America, the US and elsewhere.
JBS and its holding company, J&F Investimentos, agreed last month to sell dairy producer Vigor Alimentos to Mexico’s Grupo Lala in a deal worth $1.86bn. Joesley Batista turned himself into police, J&F confirmed Sunday, following a supreme court order.
n Bloomberg and Irish Examiner
© Irish Examiner Ltd. All rights reserved