Brazil’s JBS Revives Bid to Take Full Control of US Poultry Giant Pilgrim’s Pride

JBS, the world's largest meatpacker and a major Brazilian corporate giant, has launched a fresh effort to take full ownership of its U.S.-listed subsidiary, Pilgrim’s Pride Corporation (PPC). The company submitted a non-binding proposal on Tuesday, August 18, to acquire the approximately 18% of the poultry producer’s common stock it does not already own. The all-stock offer proposes an exchange of 2.086 JBS Class A common shares for each PPC share, a proposal that was valued at $28.49 per share based on closing prices on the day of the announcement.

The move is a clear signal of JBS’s strategy to simplify its vast, global operations by fully absorbing its U.S. protein arm, which it first took control of in 2009. JBS already owns about 82% of Pilgrim’s Pride, and its stated intention is to create a more simplified organizational structure and eliminate the costs associated with Pilgrim's Pride remaining a standalone public company. If the deal is completed, Pilgrim's Pride would be delisted from the Nasdaq stock exchange. This latest bid comes four years after a previous attempt to take the company private failed because a special committee of independent directors at Pilgrim's Pride would not agree on a valuation for the all-cash offer at the time.

The current stock-for-stock structure is possible because JBS completed its own U.S. listing on the New York Stock Exchange last year, allowing it to use its shares as currency. For Pilgrim’s Pride minority shareholders, the proposal would mean exchanging their stock in a U.S. poultry producer for shares in JBS, a far larger and more diversified Brazil-based meatpacker with operations spanning beef, pork, and prepared foods across multiple continents. To ensure fairness for unaffiliated shareholders, JBS has conditioned the deal on approval by an independent special committee of the PPC Board of Directors and a majority of the votes cast by the minority shareholders.

The non-binding nature of the offer means there is no guarantee a transaction will be completed. The process now moves to the independent special committee of the Pilgrim’s Pride board, which will review the proposal with its own legal and financial advisors. Its decision on whether to recommend the offer to minority shareholders will determine the immediate future of the U.S. company’s public status.

What it touches JBS N.V., which is listed on the New York Stock Exchange, is the central asset in this deal. The company’s stock (JBS) traded at $13.75 on Wednesday, up 0.66% on the news, as the move is viewed as a way to unlock value and simplify the corporate structure of the world’s largest beef producer.