By Rogerio Jelmayer
SÃO PAULO--Brazil's JBS SA, the world's biggest meat packager,
acquired the European poultry unit of its local rival Marfrig
Global Foods SA in a deal worth $1.5 billion, showing a continued
hunger for acquisitions.
JBS said late Sunday that it agreed to acquire U.K.-based Moy
Park from Marfrig, which is Brazil's third-largest food-processing
company. The purchase price includes the assumption of Moy Park
debt worth 300 million pounds ($476 million) by JBS.
"This transaction represents an important step in JBS's strategy
to grow its portfolio of prepared and convenient products with a
high value-added portfolio," JBS said in a statement. "In addition,
this acquisition increases the company's geographic
diversification, with a relevant expansion of its operations in
Europe."
Marfrig investors were cheered by the announcement, with the
company's shares jumping 8.7% higher to 25.25 reais ($8.22) in
midmorning trading. It was the biggest increase in the benchmark
Ibovespa index. JBS's shares rose 0.36% to 16.52 reais, while the
Ibovespa was little changed with a decline of 0.15%.
JBS, which began as a butcher shop in 1953, has completed more
than a dozen acquisitions in Brazil and internationally since 2005.
The company is the world's largest producer of proteins, with
operations in 24 countries on five continents.
JBS is controlled by Brazil's Batista family, which owns a 41.1%
stake in the business that was founded by José Batista Sobrinho,
whose initials form the company's name.
Some of Brazil's largest state-controlled banks are also big
shareholders, including the national development bank, or BNDES,
with a 23.19% stake, and Caixa Econômica Federal, with 10.07% of
the shares.
JBS's strategy has had positive effects on earnings, posting its
highest-ever quarterly net profit in the first quarter, of 1.4
billion reais, up from 70 million reais in the year-ago period.
The Moy Park deal still depends on regulatory approvals,
including from European Union antitrust authorities, JBS said.
Marfrig acquired Moy Park in 2008 for about $680 million. The
company plans to use the proceeds from the sale to decrease its
debt.
"The sale will improve significantly our capital structure, and
this is transformative for our company," Marfrig's
investor-relations chief, Marcelo Di Lorenzo, said during the
post-announcement conference call with analysts.
Marfrig sees the deal allowing it to shed nearly five billion
reais of debt; it had 13.4 billion reais in debt at the end of the
first quarter.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
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