JBS, the world’s largest beef processor, has struck three acquisitions for a combined US$1.3bn as it looks to ramp up its presence in the US and Australia.
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The company is set to buy the beef operations of US meat group Smithfield Foods in a deal worth $565m.
The Brazil-based group has also agreed to buy National Beef Packing Co., the fourth-largest beef processor in the US, in a deal worth $560m.
JBS further signalled its strength with a third deal to buy Australia’s Tasman Group for $160m.
JBS first moved to build a presence in the two key beef markets of the US and Australia with last year’s deal to buy Swift & Co., the US beef processor. The company runs 29 plants across Brazil and Argentina, in addition to the Swift operations.
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By GlobalDataWesley Mendonca Batista, CEO of JBS’ US business, said the company’s deal with Smithfield would expand its presence into new categories. “We see this acquisition as an opportunity to participate in a segment of the business and a region where we are not present today.”
Smithfield president and CEO Larry Pope said the company would spend the proceeds of the deal on businesses with a “higher return”.
“It makes sense to exit the beef business at this time,” Pope said. “While outperforming the industry, our beef group has nevertheless been a relatively minor player, as we have been unable to grow through acquisition or justify building a new plant in this adverse environment.”
Batista said the National Beef deal would see JBS look to boost its sales in the US and in Asia-Pacific. “National Beef is an industry leader in value added fresh beef in the United States and is also a leading US exporter of fresh chilled and frozen beef to Japan,” he said.
Tasman owns six plants and in its fiscal 2007 year generated net sales of A$497.7m (US$461.6m).
