JBS S.A., a Brazil-based company recognized as the world's largest meatpacker, announced a proposal on Tuesday to acquire the remaining shares of U.S. poultry producer Pilgrim's Pride. The offer seeks to give JBS full control of the company, in which it currently holds an approximately 82% stake.
The proposal follows a series of recent corporate actions by both companies. Earlier this month, JBS entered into a joint venture with Danantara, Indonesia's sovereign wealth fund, to invest in protein production across several nations. Additionally, Pilgrim's Pride recently reached an agreement to buy Walker's Deli & Sausage Company for an estimated $142 million.
Under the terms of the proposal, JBS offered 2.086 JBS Class A shares for each share of Pilgrim's Pride. Based on Tuesday's closing prices, this exchange ratio values each Pilgrim's Pride share at $28.49. At the time of the announcement, JBS shares were valued at $13.66, while Pilgrim's Pride shares were trading at $28.49. Following the news, both stocks saw increases of nearly 1% during extended trading hours.
The consolidation of Pilgrim's Pride under JBS comes as both entities navigate financial fluctuations. JBS recently reported an unexpected quarterly net loss, which the company attributed to an antitrust settlement, debt tender offers, and limited cattle supplies affecting its U.S. beef operations. Simultaneously, Pilgrim's Pride reported a decline in quarterly sales last month, citing a reduction in consumer demand for chicken. A full merger would combine these operations entirely under a single corporate structure.
The proposal must now undergo a formal review process. It requires the approval of a committee composed of independent directors from Pilgrim's Pride, as well as the consent of the company's minority shareholders. The source did not report specific dates for these votes or a projected closing date for the transaction. If approved, the deal would finalize JBS's control over one of the largest poultry producers in the United States.