Meat + Poultry - October 2009 - 14

Business Notes
JBS to acquire majority stake in Pilgrim's Pride
Brazil-based JBS S.A., through its
U.S. subsidiary JBS USA Holdings
Inc., announced in mid-September
its plans to acquire a majority stake
in Pilgrim's Pride Corp., Pittsburg,
Texas. Under the terms of the agree-

ment, Pilgrim's Pride will sell 64 percent of the new common stock of the
reorganized Pilgrim's Pride following its emergence from Chapter 11
bankruptcy protection, tentatively
scheduled for December, to JBS for
$800 million in cash.
Both companies planned to fi le a

joint reorganization plan in the U.S.
Bankruptcy Court for the Northern
District of Texas on the day of the
announcement.
Proceeds from the sale of the new
common stock of the reorganized Pilgrim's Pride to JBS will be used to pay
cash distributions to allowed claims
under the plan. Under the terms of the
plan, all creditors of the debtors holding allowed claims will be paid in full,
either in cash or by issuance of a new
note. All existing Pilgrim's Pride common stock will be cancelled and existing stockholders will receive the same
number of new common stock shares
representing 36 percent of the reorganized Pilgrim's Pride in aggregate.
"We are truly excited about
the strategic growth opportunities
available with JBS as our majority

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shareholder," said Don Jackson, president and CEO of Pilgrim's Pride. "JBS
has a well-earned global reputation
for operational and service excellence
in beef and pork production. We are
confident that our plan will earn the
support of all stakeholders and provide
the foundation for sustained, profitable
growth in the years ahead."
If approved by the bankruptcy
court, JBS's majority stake in Pilgrim's Pride will represent the company's third major investment in the
U.S. meat and poultry industry. In
2007 the company acquired Swift &
Co. and in 2008 it acquired Smithfield Beef and the Five Rivers Cattle
Feeding operation.
"As a U.S. beef and pork company,
we are proud to now enter into the U.S.
poultry industry with the acquisition
of Pilgrim's Pride," said Wesley Batista, president and CEO of JBS USA
Holdings. "We look forward to working with Pilgrim's management to increase the company's competitiveness
both domestically and internationally.
As we have accomplished with our beef
and pork platforms, we will utilize our
existing assets and strong management
to grow Pilgrim's poultry business. We
are excited about the opportunity to
work with Pilgrim's employees, contract growers, customers, vendors and
shareholders to enhance value."
The same day it announced its Pilgrim's Pride intentions, JBS also announced that controlling shareholders
of Brazilian rival Bertin S.A. and JBS
would contribute to a new holding company with their stakes being 73 percent
and 51 percent, respectively. JBS added it is estimated the respective equity
value of Bertin and JBS should be in
a proportion of approximately 40 percent-60 percent, respectively, and that
estimated synergies would be R$500
million (US$276 million) a year.
Once the Pilgrim's Pride and Bertin
deals are finally approved, JBS S.A.
boasts the deals will make it "the largest
multi-protein company in the world." ■

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Meat + Poultry - October 2009

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