CANADA: JBS closes in on XL Foods
By Chris Mercer | 10 January 2013
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JBS expects to complete the acquisition of two beef packing plants by 14 January |
Brazilians meat firm JBS expects to complete the acquisition of key XL Foods assets within a week, and is seeking regulatory approval to handle the stricken Canadian group's US operations.
JBS said today (10 January) it expects to complete the acquisition of two beef packing plants, at Brooks and Calgary in Alberta, as well as one feedlot and an adjacent 6,600 acres of farmland by 14 January.
Its statement follows news earlier this month that Canadian officials in Alberta have granted JBS an exemption to foreign ownership of land rules, which would otherwise have prevented JBS from acquiring XL Foods' sites.
The deal represents an opportunity for XL Foods to move on from a damaging product recall in 2012. In September, the US halted imports from XL Foods' plant due to findings of e. coli bacteria.
JBS said it will "in no case" take on any of XL Foods' debt or liabilities. The Brazilian giant added that it is seeking regulatory approval in the US to acquire XL's operations there; which it already controls on an interim basis.
In order to satisfy government regulations in Canada, JBS has agreed that, should it decide to cease using any of its acquired land for meat processing purposes, it must sell the land to an arms-length third party within three years.
JBS will be looking to leave behind last year's e.coli problem as quickly as possible. However, new details continue to emerge, the latest being a report by Global News that Canadian Food Inspection Agency sent six 'corrective action requests' to the company in the nine months prior to the recall in September.
BS Exercises Purchase Option of XL Foods in Canada
JBS SA (“Company”) communicates to its shareholders and to the market in general that pursuant to the Communication to the Market dated October 17, 2012, a Canadian subsidiary of JBS USA anticipates the completion of the purchase of certain Canadian operations of XL Foods on January 14, 2013.
Under the terms of the agreement, JBS will acquire the following Canadian assets:
- 1 beef packing plant in Brooks (Alberta, Canada) with capacity to process 4,000 head of cattle per day;
- 1 beef packing plant in Calgary (Alberta, Canada) with capacity to process 1,000 head of cattle per day;
- 1 feedlot in Brooks (Alberta, Canada) with a one-time capacity to feed 70,000 head of cattle; and
- 6,600 acres of farmland adjacent to the feedlot in Brooks (Alberta, Canada).
The agreement between JBS and XL Foods further permits an exclusive option to purchase the US operations of XL Foods. JBS awaits regulatory review from US authorities in this case. The US operations will continue to be operated by XL Foods during the option period.
JBS will in no case assume any of XL Foods’ debt or liabilities.
JBS will keep the market informed regarding the ongoing actions related to this agreement.
Original source: www.jbssa.com/
Sectors: Food safety, Meat & poultry, Mergers & acquisitions
Companies: JBS
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