JBS, the Brazilian meat group set to become the world’s largest protein company, is looking to drive the group’s US poultry exports once it closes its US$2.8bn acquisition of Pilgrim’s Pride.
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The purchase of Pilgrim’s, announced yesterday (16 September), will see the Brazilian beef and pork processor enter the poultry sector for the first time.
JBS’s management said the company’s international presence, particularly in markets like Russia and across Asia, could give a boost to Pilgrim’s poultry exports.
“We expect to expand Pilgrim’s Pride exports by using our knowledge of export markets,” JBS president and CEO Joesley Mendonca Batista said. “We have a very strong presence in many important markets like Russia and Asia.”
The acquisition of Pilgrim’s, which entered Chapter 11 last December, was not the only deal that JBS announced yesterday.
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By GlobalDataThe group also unveiled a merger with Brazilian beef and dairy group Bertin. The agreement will see JBS take a 60% stake in the enlarged company, which it said will be the world’s largest “multi-protein” company with annual sales of around US$30bn.
Bertin will hold the other 40% shareholding in a business that will be the world’s largest beef processor, second-biggest poultry group in the US and the number three pork firm in the market. JBS will also become the third-largest dairy processor in Brazil.
The deals came a day after Brazilian food group Marfrig became Brazil’s number two poultry processor with the US$706.2m acquisition of Cargill-owned Seara Alimentos.
JBS revealed it would look to expand its distribution network in the US and would fund the programme through the listing of local subsidiary JBS USA.
JBS was at pains to point out that the amount of leverage that the business will carry once the Pilgrim’s and Bertin transactions are completed will be roughly the same as before the deals. The company pointed to a net debt-to-EBITDA ratio of 2.6x before the transactions – and 2.7x after the deals are done.
Wesley Mendonca Batista, president and CEO of JBS USA, said it had been a “remarkable day” in the company’s history.
“These two deals are very important for JBS. We are very optimstic about the future with these two acquisitions.”
