US Department of Justice approves sale of 64% stake in Pilgrim's Pride Corporation to JBS USA Holdings

Update on October 14, 2009:

US Department of Justice has approved the proposed acquisition of a 64% stake in Pilgrim's Pride Corporation by JBS USA Holdings, Inc.

JBS USA Holdings is a subsidiary of JBS S.A., a Brazil-based producer and exporter of beef. Pilgrim's Pride is a US-based producer of poultry products.

Announcement (September 16, 2009):

JBS USA Holdings has entered into a stock purchase agreement to acquire a 64% stake in Pilgrim's Pride for an enterprise value of approximately $2,800 million in cash and debt.

Under the terms of purchase agreement, Pilgrim's Pride will issue a 64% of the total issued and outstanding new common stock in exchange for aggregate consideration of $800 million in cash.

On the closing date, the existing stockholders of Pilgrim's Pride will also become entitled to receive, for each share of common stock of the company held by them, one share of the new common stock. The existing stockholders of the company will collectively own an aggregate of 36% of the new common stock on the closing date. All creditors of the debtors holding allowed claims will be paid in full, either in cash or by issuance of a new note.

Rumor (September 3, 2009):

According to The Wall Street Journal, JBS is planning to acquire Pilgrim's Pride for approximately $2,500 million.

Rothschild and Rabo Securities USA, Inc. are acting as financial advisors and Shearman & Sterling LLP as legal advisor to JBS on this transaction.

Deal Value (US$ Million) 2800
Deal Type                Acquisition
Sub-Category             Majority Acquisition
Deal Status              Announced: 2009-09-16

Deal Participants

Target (Company)   Pilgrim's Pride Corporation
Acquirer (Company) JBS USA Holdings, Inc.

Deal Rationale

The acquisition would enable JBS to strengthen its position in meat business.

% Acquisition 64%

Related terms: acquisition, advisor, beef, brazil, debt, legal, poultry, products, securities, sterling