Industry News

Pilgrim’s Pride Acquires Tyson’s Mexican Poultry Business

Tyson Foods, Inc., Springdale, Ark., reached a definitive agreement with JBS SA, Brazil, to sell its Mexico- and Brazil-based poultry businesses.

The transaction is valued at $575 million and will be paid for in cash. Tyson Foods officials expect the sale, which is subject to regulatory approval, to be completed by the end of 2014. JBS and Pilgrim’s Pride plan to maintain all operations working to capacity with the existing workforce and all labor contracts in both countries.

“Although these are good businesses with great team members, we haven’t had the necessary scale to gain leading share positions in these markets,” says Donnie Smith, president and CEO of Tyson Foods. “In the short term, we’ll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands. Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence.”

Tyson Foods’ Mexican business will be acquired through Pilgrim’s Pride, whose majority owner is JBS USA Holdings, Inc., a wholly owned subsidiary of JBS SA. The Brazilian business is to be acquired through JBS Foods, also a wholly owned subsidiary of JBS SA.

The Mexican business, known as Tyson de México, is a vertically integrated poultry business based in Gomez Palacio in North Central Mexico. It has three plants and employs more than 5,400 team members in plants, offices and seven distribution centers.

The acquisition of Tyson’s Brazil operations, known as Tyson do Brasil, involves three fully integrated production plants—two in Santa Catarina and one in the state of Parana. Tyson do Brasil employs 5,000 team members.

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.

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