Pilgrim's Pride Corp. agreed to sell 64% of new common stock to Brazilian beef giant JBS SA for $800 million plus debt, taking the second-largest U.S. chicken processor out of bankruptcy.
The deal would create a new U.S. rival to Tyson Foods Inc., the biggest U.S. producer of beef, chicken and pork. Combined, Pilgrim's Pride and JBS's U.S. unit -- which includes JBS's Australia business -- would have posted about $20 billion in revenue last year. Tyson's revenue for fiscal 2008 was $27 billion.
JBS on Wednesday also said it agreed to merge operations with Brazilian rival, Bertin SA in a holding company, called Novo Holding. No money will change hands in the all-stock deal, in which JBS will have a 60% and Bertin the rest.
A JBS-Pilgrim deal would probably attract scrutiny from U.S. antitrust authorities, who have said they plan to take a hard look at competition in the agriculture business. Any deal is sure to raise concerns across U.S. farm country. Some ranchers and chicken farmers are worried that greater corporate concentration could decrease their power in the market and translate into lower prices for their animals.
