Brazil’s JBS SA, the world’s biggest meat packer, is acquiring Seara Brasil the domestic poultry and pork unit of rival Marfrig Alimentos SA for $2.76 billion in cash and assumed debt, the companies said this week. Payment for the acquisition will be made via the assumption of Marfrig’s debt by JBS. The deal requires approval of Brazil’s antitrust authority.
For Marfrig, the most indebted meat packer in the Western Hemisphere, the deal means a cut in net debt that jumped sevenfold in the past five years to about $4.7 billion as of March 31, racked up after a series of recent takeovers of smaller rivals. Seara was acquired from Cargill by Marfrig in 2010. The acquisition of Seara would turn JBS into the world’s largest poultry producer. The current leader in the Brazilian poultry and pork market is meat packer Brasil Foods.
Wesley Batista, JBS’s chief executive officer, recently said that the company saw room for growth in both its U.S. and Brazilian beef and chicken businesses. JBS last year entered the chicken business in Brazil and has U.S. poultry operations through Pilgrim’s Pride.
