Pilgrim’s Pride agrees to JBS takeover

Subject to approvals, JBS will acquire a 64 per cent stake in the US company that should allow it to emerge from bankruptcy by the end of 2009, Pilgrim’s announced in a statement. The move will see all the firm’s creditors paid off while existing shareholders would receive “the same number of new common stock shares representing 36% of the reorganized Pilgrim's Pride in aggregate”.​

Profitability​

The deal also calls for an exit facility for senior secured financing in an aggregate principal amount of $1.75 billion to be provided by a group of lenders arranged by Joint Lead Arrangers CoBank, ACB and Rabobank.

Pilgrim’s said that it had transformed itself in the last 10 months to become more efficient.

“We have returned to profitability, the quality of our asset base has improved significantly and we are gaining additional business,”​ said Don Jackson, president and chief executive officer.

He added: “While we recognize that some of the changes made during our restructuring have been painful for our employees and contract growers, these decisions were absolutely necessary in helping Pilgrim's Pride to operate more efficiently while protecting the greatest number of jobs in the long-term.”​

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Diversification​

JBS, which has made 30 takeovers since 1993, said it had also reached agreement to buy Brazilian rival Bertin in a share swap that will create a holding company that will control both meatpackers.

The takeover of Pilgrim’s Pride is a further proof of JBS’ diversification strategy from beef. In 2007, the company bought Swift and became the third largest pork processor in the US. The latest two acquisitions are forecast to boost JBS sales to over $30bn in 2010, the company said.