Pilgrim’s Pride has acquired Moy Park, a European-based chicken and prepared foods manufacture, for $1.3 billion. The deal will give the Greeley, Colo.,-based company access to markets in the United Kingdom and throughout Europe. The acquisition was made by JBS S.A., the Brazilian subsidiary of Pilgrim’s Pride, which will reportedly use the funds to reduce its short-term debt.
Bill Lovett, CEO of Pilgrim’s Pride, said the deal will allow the company to become a global player in the chicken business with an improved margin profile and expanded prepared foods portfolio. Pilgrim’s Pride’s board of directors has unanimously approved the deal which the company is funding with cash
“Following our successful acquisitions of GNP and the [Tyson Foods] assets in Mexico, Moy Park represents a logical next step in the evolution of our geographical and brands footprint,” Lovett noted in a news release. “The acquisition gives us access to the attractive UK and European markets, which advances our strategy of diversifying our portfolio to be more global while reducing volatility across our businesses. We will have new business opportunities through the addition of Moy Park’s fully integrated poultry production platform and its strong presence in prepared foods.”
The acquisition has been unanimously approved by a special committee of Pilgrim’s Pride’s board of directors. JBS is one of the company’s largest shareholders and the company said the special committee consists of independent equity directors unaffiliated with JBS.
The deal includes seven processing plants — four which are focused on primarily chicken processing and three plants dedicated to value-added products such as marinated, cooked or partially cooked products. The two brands included in the deal are Moy Park Chicken and O’Kanes. Pilgrim’s Pride expects to see $50 million in “synergies” with the merger over the next two years, according to the release.
May Park’s headquarters will remain in Northern Ireland and its management team will continue to run the company, with Janet McCollum remaining as CEO.
“Joining Pilgrim’s gives us the opportunity to accelerate our growth plans, share best practices and leverage Pilgrim’s expertise and operational excellence,” McCollum said in the release. “Moy Park will provide Pilgrim’s with a platform for growth in Europe as well as access to innovation and increased exposure to prepared foods.”
JBS has its own set of concerns as a former chairman. Joesley Baptista, one of the owners of JBS, was arrested over the weekend in a political corruption scandal in Brazil involving several acquisitions throughout Latin America.