Ailing US poultry processor Pilgrim’s Pride would be an “attractive” takeover target for Brazil-based meat giant JBS, an analyst has told just-food, as speculation mounts over a possible bid.
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Both Pilgrim’s Pride and JBS failed to return requests for comment overnight after reports in Brazil claimed JBS had approached the US group for takeover talks.
Pilgrim’s Pride fell into bankruptcy last December due to massive debts and is busy revamping the business since it filed for Chapter 11.
JBS snapped up Smithfield Foods’ US beef operations last October but “terminated” a deal to buy local beef firm National Beef Packing Co. amid concern from US competition regulators.
Ann Gilpin, analyst at US investment research firm Morningstar, said Pilgrim’s Pride represents a cheap but attractive target for JBS.
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By GlobalData“Pilgrim’s Pride has a good amount of scale and is the market leader in chicken in the US. It would be an attractive target because they are in bankruptcy proceedings right now, so they can restructure their debt,” Gilpin told just-food.
“Basically, JBS can buy the largest US chicken processor for pennies on the dollar. JBS has already shown an interest in expansion in the US and I think this would just further their presence here. It is certainly a lot easier than starting from the ground up.”
