September 12, 2017
Pilgrim's Pride to acquire Moy Park from JBS SA
Pilgrim's Pride will acquire UK poultry producer Moy Park from JBS SA in a GBP790 million (US$1.04 billion) deal, Bloomberg reports.
According to Pilgrim's Pride, the deal is expected to fetch about US$50 million in annual cost savings over the next two years. It was approved by independent members representing a committee of minority shareholders, who were conferred full authority by the company to analyse, negotiate and approve the transaction.
The agreement will pave the way for Pilgrim's Pride's growth opportunities in Europe as the company will be able to engage 300 million more consumers and access chicken production in the UK.
The US chicken producer's takeover of Moy Park will be funded with cash on hand, existing credit facilities and a seller financing note issued to JBS, which Pilgrim's Pride will replace with permanent financing.
The enterprise value of the Moy Park deal is about US$1.3 billion, Pilgrim's Pride revealed. Moy Park was acquired in 2015 by JBS for about US$1.5 billion. The latter held 79% of shares in the Northern Ireland-based company.
With the announcement of the deal, JBS shares rose 0.7% to BRL8.25 (US$2.68) on September 11 (New York time) while Pilgrim's Pride's stocks dropped 3.8% to US$27.99.
JBS SA, which has recently been embroiled in a bribery scandal and saw the recent arrest of its former chairman, will use proceeds from the Moy Park deal to mitigate its short-term debt in Brazil. The company said that the deal will support its diversified product portfolio as well as bolster its bid for a public listing in the US.