JBS acquires beef businesses
March 05, 2008
by Bryan Salvage
SAO PAULO, BRAZIL ― JBS SA, already the world’
s largest beef processor following the acquisition of Swift & Co., Greeley, Colo., in July, has acquired Smithfield Foods, Inc.’s beef business, including its cattle feeding operations, Five Rivers Ranch Cattle Feeding L.L.C., for $565 million. The news followed JBS’s announcement it was acquiring National Beef Packing Company L.L.C., Kansas City, for $560 million in cash and stock, as well as Tasman Group in Australia for $148 million.
National Beef Packing, which is owned by U.S. Premium Beef L.L.C., is the nation’s fourth-largest beef processor while Smithfield Foods is the fifth-largest. Combining Swift, Smithfield and National beef businesses will make JBS SA the largest beef processor in the United States.
"We see this acquisition as an opportunity to participate in a segment of the business and a region where we are not present today," said Wesley Mendonca Batista, chief executive officer of JBS U.S.A., discussing the agreement with Smithfield Foods.
Smithfield’s beef business has the capacity to process 7,600 head of cattle per day. Its Five Rivers feedlot operation is the largest in the United States with a one-time feeding capacity of 811,000 head of cattle.
The National Beef Packing acquisition will combine all of the company’s operations and facilities, including National Carriers, Inc. and its ownership in the Kansas City Steak Company L.L.C. with JBS’s Swift Beef operations. Tim M. Klein, National Beef’s current president, will become president and chief operating officer of the joint National Beef/JBS-Swift beef operations.
Through its Swift Australia division, which is a subsidiary of JBS, the company acquired the Tasman Group. The company processes approximately 2.7 million head annually and is based in Brooklyn, Australia, which is near Melbourne. The company has facilities in Brooklyn, Cobram, Yarrawonga, Longford, Devonport and King Island, in Tasmania. The company also owns a feedlot in New South Wales.
Both U.S. acquisitions are contingent on regulatory approvals.
JBS SA operates meat businesses throughout the world and has annual revenue of approximately $12 billion. Last year, it processed approximately nine-million head of cattle.
Yesterday’s announcements are the latest in a continuing string of global meat industry acquisitions for JBS. This past December, it acquired a 50% stake in Italian beef producer Inalca SpA for $342.2 million. Five months earlier, it purchased Colorado-based Swift & Co. for $1.5 billion.