Pilgrim’s Pride said Monday it had acquired one of Europe’s largest poultry producers from its own parent company in a $1.3 billion deal to increase its global footprint.
The sale of Moy Park amounts to an asset transfer for Brazil’s JBS SA, which is Pilgrim’s major shareholder with a 78.5% stake and has been offloading assets to raise cash amid a corruption scandal.
Northern Ireland-based Moy Park processes an average of 5.7 million birds a week, adding to Pilgrim’s capacity of more than 34 million birds a week.
The deal “will position Pilgrim’s to become a global player, with an improved and more stable margin profile on the chicken business and an expanded portfolio of prepared foods,” Pilgrim’s CEO Bill Lovette said in a new release.
He also called the acquisition “a logical next step in the evolution of our geographical and brands footprint” following the company’s purchases of Tyson’s Mexico unit for $625 million in 2015 and of GNP, a provider of chicken products in the Upper Midwest, for $350 million earlier this year.
Moy Park has grown from a small farm in County Tyrone to Northern Ireland’s largest private employer and now accounts for about 25% of the chicken consumed in Western Europe. It was acquired two years ago by JBS for $1.5 billion from Marfrig, another Brazilian firm.
As Reuters reports, JBS has been struggling with the fallout from allegations that controlling shareholders Wesley and Joesley Batista bribed nearly 1,900 politicians over the past decade.
“According to two people familiar with the deal, Moy Park’s purchase should help JBS boost the allure of assets it plans to list in the United States by the end of next year,” Reuters said. “The deal, said one of them, is a ‘transfer of assets’ that helps protects revenue at a holding firm grouping JBS’ non-Brazilian assets.”
Pilgrim’s expects the Moy Park purchase to add $2 billion in annual revenue and reduce costs by $50 million over the next two years.
“The acquisition gives us access to the attractive U.K. and European markets,” Lovette said.