JBS to Buy Cargill Pork as Well as Moy Park Poultry Unit
JBS USA Pork, a wholly owned subsidiary of São Paulo, Brazil-headquartered JBS S.A., has entered into an agreement with Minneapolis, Minnesota-based Cargill to purchase the company’s US-based pork business for $1.45 billion.
Upon completion of the acquisition, which is subject to regulatory review and approval, JBS will become the second largest pork producer in the United States, behind Smithfield Foods. Annual sales will rise to approximately $6.3 billion and it will have capacity to process more than 89,000 pigs per day.
Controlled by Brazil’s Batista family, which owns 41.1% of the company, JBS S.A. has been focusing on enhancing its profile in the higher margin packaged foods sector during the past several years.
“This courtship started years ago,” said Wesley Batista, JBS’s global ceo.
The news came in a matter of days after JBS announced its intention to acquire Craigavon, Northern Ireland-headquartered Moy Park, the European poultry unit of Marfrig Global Foods SA, in a deal valued at approximately $1.5 billion. JBS will reportedly pay about $1.19 billion in cash, and assume debt payable to bond holders by 2021.
“Our agreement to purchase the Cargill pork operations is a strategic investment in the long-term growth of our domestic and global pork business and demonstrates our continued commitment to the US livestock sector,” said Martin Dooley, president and chief operating officer of Greeley, Colorado-based JBS USA Pork. “This transaction will strengthen our position as a producer and supplier of all major animal proteins around the world, and provide increased opportunities for our producer partners and key customers.”
Included in JBS’ acquisition of Cargill’s pork business are two Midwest meat processing plants, one in Ottumwa, Iowa, and the other at Beardstown, Illinois? Both plants were acquired by Cargill in 1987, and in 2014 they processed 9.3 million hogs.
The purchase by JBS also includes five feed mills (two in Missouri, and one each in Arkansas, Iowa and Texas), and four hog farms (two in Arkansas and one each in Oklahoma and Texas).
JBS first entered the US pork market with the acquisition of Swift & Company in 2007. Employing over 6,000 people, the company has total daily capacity to process more than 50,000 hogs at processing facilities in Marshalltown, Iowa; Worthington, Minnesota; and Louisville, Kentucky. JBS USA Pork offers a wide selection of well-known brands including Swift and Swift Premium.
The announced transaction will enhance JBS USA Pork’s ability to meet increasing global demand for high-quality frozen and non-frozen pork products around the world.
JBS USA also processes beef and lamb in the United Sates, is a processor of beef in Canada, a packer of beef and lamb in Australia, and is a majority shareholder of Pilgrim's Pride Corporation, the second-largest poultry company in the United States.