JBS renews push to take Pilgrim's Pride private in all-stock offer
JBS has made a fresh, non-binding proposal to buy out Pilgrim's Pride minority shareholders via a stock swap, seeking full control and a delisting.
Brazilian meatpacker JBS has made a fresh attempt to gain full control of US poultry producer Pilgrim's Pride, proposing to acquire the remaining shares it does not already own through a stock swap.
The world's largest meatpacker, which currently holds about 82% of Pilgrim's Pride, is offering 2.086 of its own Class A shares for each Pilgrim's Pride share. The offer implies a value of $28.49 per Pilgrim's share, roughly in line with the stock's closing price on Tuesday.
Pilgrim's Pride shares rose 7% in extended trading following the announcement, while JBS shares gained about 1%.
JPMorgan analyst Lucas Ferreira viewed the deal positively from a valuation perspective. He noted that JBS shares now serve as a better currency than cash for this purpose, given the favorable relative value between the two entities and the lack of pressure on the balance sheet.
This is not the first time JBS has pursued full ownership of Pilgrim's Pride. The company acquired a majority stake in 2009 and attempted to buy the remaining shares in 2021, but withdrew that all-cash proposal after the two sides failed to agree on a price.
Pilgrim's Pride currently has a market capitalization of about $6.8 billion. Its shares have fallen roughly 27% year-to-date, reaching their lowest intraday level since February 2024 last week. JBS, listed on the New York Stock Exchange since last year, has seen its shares decline about 5% this year, giving it a market cap of $14.6 billion.
JBS said the transaction would simplify its organizational structure, eliminate Pilgrim's standalone public company costs, and allow for more flexible and efficient capital allocation across the group.
The proposal is non-binding and remains subject to review and approval by a committee of Pilgrim's Pride's independent directors and its minority shareholders.
The announcement comes after a busy period for JBS, which earlier this month named Wesley Batista Filho as its new chief executive effective 2027 and agreed to form a joint venture with Indonesia's sovereign wealth fund. It also follows Pilgrim's Pride's recent agreement to acquire Walker's Deli & Sausage Company for approximately $142 million.