JBS to Buy Pilgrim’s Pride?

Brent Finnegan -- September 4th, 2009

The Wall Street Journal and WSVA have reported that Brazilian company JBS, the world’s largest beef processor, may buy Pilgrim’s Pride for more than two billion dollars.

Brazilian beef giant JBS SA is set to announce as soon as next week the acquisition of Texas-based Pilgrim’s Pride Corp. for a price of roughly $2.5 billion, say people familiar with the matter. The deal would pull the second-largest chicken company in the U.S. out of bankruptcy court and shake up the global meat business … if it moves ahead as expected, it would create a new US. rival to Tyson Foods Inc., the biggest U.S. meat company that produces beef, chicken and pork. (WSJ)

Last year, Pilgrim’s laid off some local workers and filed for chapter 11 bankruptcy.

Although the deal has not been confirmed by an official source, Reuters reports that antitrust laws will likely not be a roadblock for the two companies alleged plans.

JBS would likely get U.S. antitrust approval if it decides to buy U.S. chicken producer Pilgrim’s Pride even though the already concentrated American meat market would lose yet another player.

These developments follow some bad press for JBS less than a month ago. The company was accused of bad farming policies, and the destruction of Brazilian rain forests.

Investigators raided the offices of JBS, the world’s largest beef processor, and other firms, arresting executives for corruption, fraud, and collusion. A Brazilian federal prosecutor filed a billion-dollar law suit against the cattle industry for environmental damage … JBS-Friboi is the remaining holdout among Brazilian cattle industry majors. Greenpeace says that JBS has remained mum on the issue and has actually expanded operations in the Amazon in the wake of the scandal.

Large distributors and stores, including Wal-Mart, washed their hands of “deforestation beef.” Then, several days ago, JBS announced a new agreement with Wal-Mart.

JBS said both parties pledged to guarantee that beef will not be sourced from properties within the Amazon Biome that have been “blacklisted” by the Brazilian Environment Institute or from ranchers who have exploited child or “slave-like” labor.

Neither companies’ spokespersons are commenting on the JBS-Pilgrim’s deal, which they have referred to as “rumor or speculation.”

5 Responses to “JBS to Buy Pilgrim’s Pride?”

  1. Jeremy Aldrich says:

    When a company is too evil for Wal-Mart, that’s really saying something.

  2. I couldn’t help but chuckle at the subheadline in the Reuters story, “JBS-Pilgrim’s deal would create powerful No. 2 in U.S.”

    Indeed.

  3. adnarim says:

    My husband raises chickens for pilgrams pride.We have been throuhg a lot with this company and do not know exactly what is going on our selves.I have never heard of this JBS co.I have to say that what ever happens I hope for the sake of all the families that grow for pilgrams pride that they do what is best all around for every one.Gold Kist should have never sold to Pilgrams pride to start with.And now planing to sell to this other company or not,they should really think long and hard before doing any thing.So many people have been laid off so far.But if this JBS will help get the jobs back and secure our farms then maybe its best that they sell.

  4. David Haynes says:

    Gold Kist did not sell to pilgrims Bo bought enough stock to just take over. Growers and all us hourly plant workers have been in trouble since the end of the Co-Op days. The hourly people have been on a downword trip ever since then, it speed up greatly when Bo took over. I am glad a new company bought it if this would have happened a few months ago I might still be working. I worked at a hatchery that was cut back to two days a week so some people had to go. 18 years with a company means nothing when they want to cut back. There were 7 of us let go and a contract crew hired we were told it saved the company st least 58,000 dollars a year on each of us. Money talks bulls–t walks as they say.

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