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Montevideo, November 16th 2018 - 10:14 UTC

Brazil's giant meat packer JBS sells feed-lot assets in several US states

Monday, March 19th 2018 - 08:45 UTC
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Pinnacle Asset Management, a private New York-based asset management firm that focuses on global commodities markets, bought the operations for US$200 m. Pinnacle Asset Management, a private New York-based asset management firm that focuses on global commodities markets, bought the operations for US$200 m.

It took about eight months, but Brazil's giant meat packing industry JBS is finally free of its Five Rivers Cattle Feeding operations. The Greeley-based company in Colorado had planned since last June to sell its massive cattle feeding operations, which span six states including Colorado. The deal became final and closed on Friday.

Pinnacle Asset Management, a private New York-based asset management firm that focuses on global commodities markets, acquired the operations for US$200 million. Pinnacle will work with Arcadia Asset Management and Ospraie Management, both of which have extensive experience in the cattle industry, to manage the operations.

Steve Gabel, owner of Magnum Feedyard Co. in Wiggins, which markets its fed cattle to JBS and its packing house in Greeley, said the sale was at least to people who know the business.

“I think it just closes the book on lots of uncertainty, which is a good thing because there was a lot of speculation,” Gabel said Friday. “They are the largest cattle feeding company in the world, who's going to butt them?

”They were able to identify a group that has at least experience feeding cattle. And I think they're well funded, and I think that puts to bed rumors about China or some other foreign country getting involved in ownership of the largest cattle feeding operator in the world. As industry participants and industry members, we welcome them into the business.”

The sale to Pinnacle includes 11 feed yards across Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas, with feeding capacity of more than 900,000 animals. The firm also agreed to supply cattle to JBS USA beef processing plants.

The sale was a part of a US$ 1.8 billion divestment plan with the global company in the wake of a Brazilian bribery scandal, which resulted in a US$ 3.1 billion fine, and JBS leaders going to jail.

JBS acquired Five Rivers in 2008 from Smithfield Foods and began an immediate renovation of its Kuner feed-yard east of Greeley, which was complete in 2010. That same year, JBS also acquired a feed-yard in Arizona, and in 2013, it acquired a feed-yard in Alberta, Canada.

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