Moy Park changes hands in €1.3bn takeover deal

Moy Park — the North’s largest private-sector employer and one of the leading poultry producers in Europe — has changed ownership as part of a $1.5 billion (€1.3bn) takeover deal.

The Craigavon-headquartered company employs 12,000 people in Ireland, Britain, and mainland Europe.

It has been sold by its Brazilian owner of the past six years, food-processing giant Marfrig, to another Brazilian business, meat-packing giant JBS, which ranks as the world’s largest meat-packing company.

Moy Park accounted for 26% of Marfrig’s revenues and has consistently shown annual growth — with revenues of €1.9bn recorded last year — while its parent has struggled financially.

The takeover deal requires approval by European antitrust regulators. The companies expect to conclude the transaction by the end of the year.

Moy Park will give JBS access to affluent markets in Britain, Scandinavia, and other European countries where consumption of processed foods is growing. JBS, which has undertaken a massive overseas expansion since 2007, will pay $1.19bn in cash and will assume Moy Park’s debt, totalling £200m, as part of the deal, Marfrig said.

“This transaction represents an important step in JBS’ strategy to grow its portfolio of prepared and convenient products with high value-added portfolio,” JBS investor relations officer Jeremiah O’Callaghan said.

The deal will also help Marfrig reduce its debt, currently at about $5bn. The company said it will focus on increasing beef exports from Brazil to Asia and the US, boosting free cashflow generation, and expanding its food service business through its Keystone subsidiary.

Moy Park is not the first deal between JBS and Marfrig. A couple of years ago, JBS agreed to buy processed-foods maker Seara from Marfrig, allowing JBS to significantly increase its market share in Brazil.

Marfrig said: “The use of the proceeds from this transaction is to reduce leverage. The transaction significantly improves Marfrig’s capital structure, accelerating the expected reduction in its financial leverage and the associated interest expense.”

It added that the sale will allow it to focus on its existing operations in the US and Asia. “The sale of Moy Park will enable Marfrig to have a greater focus in pursuing growth opportunities identified in its strategic plan, ‘Focus to Win’. The resulting Marfrig becomes a company with a stronger focus in food service, with greater flexibility to pursue existing opportunities in this market, mainly in the US and Asia.”

Additional reporting Reuters