GREELEY, COLO. — Pilgrim’s Pride Corp. received acquisition approval of Tyson Food Inc.’s Mexican operations from the Mexican Federal Economic Competition Commission.
Pilgrim’s Pride, a subsidiary of JBS SA, said the approval satisfies the final regulatory approval required for closing by the commission, and the company now will work with Tyson to complete the deal as soon as possible.
“We are excited to welcome members of Tyson de Mexico to the Pilgrim’s family,” said Bill Lovette, chief executive officer of Pilgrim’s. “Beyond growth, this transaction will also provide Pilgrim’s with geographic diversity in Mexico through the addition of new facilities in the northern part of the country to complement our existing facilities, enhance our portfolio through more value added and branded products, including the Del Dia brand, and increase our total Mexico sales. Mexico is a key piece of our strategy and we view the country as a proxy of other developing economies’ future demand for higher protein consumption.”
Tyson Foods and Pilgrim’s Pride reached a definitive agreement on the sale last July. The Mexican business, known as Tyson de Mexico, is a vertically integrated poultry business based in Gomez Palacio in North Central Mexico. It employs more than 5,400 people in its offices, three plants and seven distribution centers.
After the sale is completed, Tyson Foods will continue to serve customers in Mexico. The company will supply them with U.S.-produced chicken as well as chicken produced in Mexico, in part through a co-packaging arrangement with Pilgrim’s Pride.
The all-cash transaction was valued at $575 million, and Tyson said it planned to use proceeds from the sale to pay down debt related to its acquisition of Hillshire Brands Inc. last year.Tyson de Mexico has an estimated annual revenue of $650 million and the acquisition was valued at $400 million.