Cargill is considering placing an offer to buy US chicken producer Pilgrim’s Pride, according to Brazilian newspaper O Estado de S. Paulo.
The newspaper estimates that Pilgrim’s Pride is worth around $6 billion.
JBS, the world’s largest meat packer, bought a controlling stake in Pilgrim’s Pride in 2009 for $2.8 billion. However JBS has been embroiled in an extensive corruption scandal in Brazil and the controlling shareholder of JBS, J&F Investimentos, has been forced to pay a record $3.2 billion fine.
J&F owners Joesley and Wesley Batista admitted spending $184 million to bribe nearly 1,900 politicians.
Last month, JBS launched an extensive disinvestment programme it hopes will raise $1.8 billion. The company said it will would sell Five Rivers Cattle Feeding and its controlling stakes in Moy Park and Vigor Alimentos.
If the deal for Pilgrim’s Pride were to go ahead, it would complement Cargill’s recent purchase of Colombian chicken producer El Bucanero as it boosts its presence in Latin America. The commodities trader said it would invest ‘between €300 million and €500 million’ in Colombia over the next five years.
Cargill chief executive David MacLennan said he ‘feels good about our underlying progress’ after structural changes led to growth in both full-year revenue and net earnings.
The company’s revenue for the 2016/17 fiscal year was $109.7 billion – up 2% – while net earnings were 19% higher at $2.84 billion. “We’re in a stronger position today to deliver the solutions our customers seek,” MacLennan said.
Cargill has yet to make a formal approach and it is understood that, because of the JBS corruption case, it will first seek the position of the US Department of Justice before making a move.
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