Brazil’s JBS makes offer for 100% of Pilgrim’s Pride, largest U.S. chicken company

RIO DE JANEIRO, BRAZIL – The largest chicken company in the US, controlled by JBS since 2009, is worth US$5.5 billion on the Nasdaq stock exchange.  The offer – sent last night to the board of Pilgrim’s Pride (PPC) – is a 17% premium over yesterday’s closing share price (US$22.68) and 22% over the average of the last 30 days.

The transaction will be evaluated by a committee of independent members of the PPC board, advised by legal and financial advisors chosen by the committee itself. In addition, the offer needs a simple majority among PPC’s minority shareholders.

With its record-breaking EBITDA and leverage in free fall, JBS has used its phenomenal cash generation to accelerate share buybacks and pay dividends. Now it seems to have found another way to allocate capital.

By making PPC a wholly-owned subsidiary, JBS reduces its corporate complexity and strengthens the long-awaited US listing of its global protein business.

JBS bought Pilgrim’s Pride 12 years ago when the largest US chicken producer was in receivership.

The Brazilian multinational offered to buy 64% of PPC for US$800 million in cash, a transaction that allowed Pilgrim’s Pride to emerge from receivership and valued the company at US$1.25 billion.

As part of that transaction, PPC shareholders received new shares equal to 34% of the company, a stake valued at US$450 million.

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