Pilgrim’s Pride Buys Moy Park from Parent Company JBS
Sao Paulo, Brazil-headquartered JBS SA has sold Moy Park, a major poultry and prepared foods supplier with operations in the United Kingdom and continental Europe, to its Greeley, Colorado, USA-based Pilgrim's Pride Corporation (PPC) subsidiary for approximately $1.0 billion (about £790 million). The deal is based on a 1.31 exchange rate as of September 8, 2017, implying an enterprise value of approximately $1.3 billion (or £1.0 billion).
Moy Park’s product range is comprised of value-added poultry, ready-to-eat meals, breaded and multi-protein frozen foods, vegetarian foods and frozen desserts, supplied to major food retailers including Asda and Tesco, as well as restaurant chains such as McDonald’s and Burger King in the UK and continental Europe.
Headquartered in Craigavon, Northern Ireland, Moy Park ranks as one of the United Kingdom's top 10 food companies, is Northern Ireland's largest private sector business and one of Europe's leading poultry producers, accounting for roughly 25% of total chicken consumption in the EU. It processes approximately 5.7 million birds per week, in addition to producing around 200,000 tons of prepared foods per year at 13 processing and manufacturing units in Northern Ireland, the UK, France, the Netherlands and Ireland.
Extends Reach Globally
"The acquisition will position Pilgrim's to become a global player, with an improved and more stable margin profile in the chicken business and an expanded portfolio of prepared foods," said Bill Lovette, PPC's chief executive officer. "Following our successful acquisitions of GNP and the assets in Mexico, Moy Park represents a logical next step in the evolution of our geographical and brands footprint. It gives us access to the attractive UK and European markets, which advances the strategy of diversifying our portfolio to be more global while reducing volatility across our businesses."
Janet McCollum, chief executive of Moy Park, commented: "This announcement is a positive development for the company and all our colleagues employed across the business. Pilgrim's is one of the leading chicken producers in the world with a proven track record, and we see great opportunities as part of this successful business.”
She added: “Both companies have a long heritage in agriculture and poultry production going back over 70 years, and we share the same values. We look forward to this new and exciting phase of Moy Park's development.”
Moy Park’s Craigavon-based management team will continue to lead the business, and the rest of the employee base will remain in place as the company operates as a unit within Pilgrim’s Pride and maintains its day-to-day activities and strategic focus.
PPC employs approximately 42,000 people and has chicken processing plants and prepared foods facilities in 14 states in the USA, Puerto Rico and Mexico. The bulk of its turnover is generated through retail and foodservice channel sales of Gold Kist, County Post, Pierce Chicken, Pilgrim's Pride and GNP brand products.
Prelude to IPO of Division?
As JBS SA owns 78.5% of Pilgrim’s Pride shares, the Moy Park transaction is viewed by some observers as essentially a transfer of non-Brazilian assets to preserve revenue in more profitable activities abroad and enhance its allure at a time when the world’s biggest meat packer faces a corruption scandal at home.
According to a Reuters dispatch on September 11: “The deal, which will help JBS make upcoming debt payments, follows a string of asset sales by holding company J&F and controlling shareholders Wesley and Joesley Batista, who are snared in a corruption probe after admitting to bribing 1,893 politicians in Brazil over the past decade…The Batistas are aiming to list the division, JBS Foods International, in New York by the end of next year.”
Meanwhile, Bloomberg News reported on Monday that Joesley Batista and J&F executive Ricardo Saud have turned themselves into federal police in Sao Paulo following a Supreme Court order for their arrest.
Tatiana Freitas and Felipe Marques reported said that the order followed “a request for their arrest by Rodrigo Janot, the country’s chief prosecutor, who said that Batista and Saud left out information from testimony submitted to Brazilian prosecutors earlier this year, when they confessed to graft and other crimes. According to the judge, if the two executives were left at liberty ‘they would find the same incentives directed to concealing part of the probative elements’ of their testimony.
A statement released by J&F said that both men underscored that they did not lie nor omit information from their plea-bargain deal with prosecutors and that they remained “totally willing to contribute to justice.”
A separate statement issued by a lawyer for the two men asserted that Janot’s decision to request the arrests despite their cooperation undermined the general credibility of plea bargain deals.