MercoPress. South Atlantic News Agency

Brazil’s JBS moves into the US poultry market and consolidates at home

JBS has become the world’s leading integrated food processor

Brazil's JBS, the world's biggest beef producer, agreed this week to buy a controlling take in bankrupt US poultry producer Pilgrim's Pride and JBS' Brazilian beef rival Bertin.

Pilgrim's Pride filed for bankruptcy protection in December 2008 due to high feed costs, low chicken prices and heavy debts. It has cut production, closed plants and laid off workers to improve results.

Bertin, founded by the family of that name 30 years ago, is Brazil's No. 2 beef producer with 38 plants in Brazil and abroad. Its takeover will consolidate JBS's position as a global beef player.

As the Brazilian Real currency strengthened against the dollar in recent years, JBS went on an international buying spree, snapping up distressed competitors such as US beef producers Swift Corp in 2007.

The takeover of the United States' second largest poultry producer as well as Bertin's massive beef export platform in Brazil will turn JBS into one of the world's largest, fully integrated meat producer, rivalling US-based Tyson Foods.

In 2005 JBS took its first step abroad buying 85% of beef producer Swift Armour, Argentina's largest beef processor, for 200 million. In 2007 it bought US-based Swift Foods for 225 million USD and assumed its heavy debt load estimated at more than one billion USD, a few months after going public on the Sao Paulo Stock Exchange.

Last year JBS bought Australian-based beef producer Tasman Group for 107 million USD in cash and later US processor Smithfield Beef from Smithfield Foods for 565 million USD. It also purchased 50% of European beef processor Inalca with plants in Italy, Russia and Africa for 328 million USD.

This year the Brazilian multinational agreed to buy a 64% stake in the restructured Pilgrim's Pride for 800 million USD and Brazil's No.2 beef producer after JBS in an all stock deal.

With these acquisitions JBS has a 21% share of the US beef market; 11% of the hog market and 18% of poultry.