Tyson Foods to Sell Mexico and Brazilian Poultry Businesses
by July 28, 2014 7:38 am 388 views
Tyson Foods, Inc. of Springdale has reached a definitive agreement with JBS SA to sell its poultry businesses in Mexico and Brazil, the company announced Monday.
JBS SA is the parent of JBS USA Holdings Inc., which owns Pilgrim’s Pride. Tyson’s Mexican business will be acquired through Pilgrim’s Pride. The Brazilian business, known as Tyson do Brasil, is to be acquired through JBS Foods, also a wholly owned subsidiary of JBS SA.
The transaction is valued at $575 million and will be paid for in cash, according to a news release. Tyson Foods officials expect the sale, which is subject to regulatory approval, to be completed by the end of the year.
Earlier this month, Tyson Foods reached an agreement to buy Hillshire Brands Co., the maker of Jimmy Dean sausages and Ball Park hot dogs. The all-cash transaction is worth $7.73 billion, or $8.55 billion including Hillshire Brands’ outstanding debt.
“Although these are good businesses with great team members, we haven’t had the necessary scale to gain leading share positions in these markets, Tyson Foods president and CEO Donnie Smith said in a news release. “In the short term, we’ll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands.”
Tyson Foods will to continue to grow its its poultry operations in Asia, according to the release, which include three poultry plants in China and majority ownership of two poultry plants in India. Combined, these Asian operations employ approximately 5,000 people.
Also on Monday, Tyson Foods reported record earnings for the fiscal third quarter. Earnings increased to $260 million, or 73 cents per share, from $249 million, or 68 cents per share, in the same quarter last year.
Revenue climbed 11 percent to $9.68 billion from $8.73 billion in the same quarter a year ago.
“We are nearing the end of what looks to be the best year in our company’s history,” Smith said in a news release. “We’re looking forward to closing on the Hillshire acquisition before the end of our fourth quarter, and we’re excited about combining the protein industry’s best marketing and operations talent into one team.”
Tyson Foods also announced Friday it will close three of its plants in Iowa, New York and New Mexico.