February 14, 2008

Tyson to enter Brazil's chicken market with US$74.4 million purchase in March

Privately held Brazilian chicken company Pena Branca expects Tyson Foods Inc. (TSN) to acquire 100% of its poultry operations in March, Pena Branca's director confirmed Wednesday (February 14, 2008).

"Lawyers will complete the due diligence this month and the deal should be completed in March," said company director Antenor Barros Leal.

Leal estimated Tyson will pay 130 million Brazilian reals (US$74.4 million) for Pena Branca's poultry operation.

The US company will acquire meatpacking units in Sao Paulo state with a capacity to slaughter 320,000 chickens a day, financial newspaper Valor Economico reported.

Tyson announced in November it planned to purchase a poultry company in Brazil before the end of the year, but did not provide further details.

Pena Branca is part of the family-owned Predileto Alimentos holding company. Predileto also owns Moinhos Cruzeiro do Sul, a wheat milling company. Predileto will continue to focus on its wheat milling activities, said Leal.

If the deal passes, it will be Tyson's first chicken-processing facility in Brazil, the world's top chicken exporter.