JBS SA, the world’s largest meat processing company, agreed to buy Marfrig Global Foods’ British poultry and processed foods company, Moy Park, for $1.5 billion, according to Meatingplace; both companies announced the agreement Sunday. Moy Park Holdings Europe Ltd. is one of the largest food processors in the United Kingdom and has 14 units in Northern Ireland, England, France, the Netherlands and the Republic of Ireland. The company has a processing capacity of 240 million birds per year, according to Marfrig’s website.
JBS said via a statement that the acquisition increases its geographic diversification, by way of “relevant expansion” of its operations in Europe. The company will also assume Moy Park debt as part of the transaction. Marfrig said the Moy Park sale is in line with its strategy to focus on priority areas such as the expansion of Keystone’s food service in Asia and in the United States, beef exports from Brazil to those two markets, strengthening of capital structure and increase in free cash flow. “The transaction improves Marfrig’s capital structure, anticipating significantly the expected reduction of leverage levels, and [it] will materially reduce expenses with interests associated to it,” the company said in a statement.
Marfrig had said in May during its first quarter results it was still planning to launch Moy Park’s initial public offering (IPO) in the UK in the second half of this year. Moy Park posted record net income for a first quarter this year with BRL 1.5 billion ($484 million), up 17 percent from the same quarter in 2014, contributing to Marfrig’s total revenue of BRL 5.9 billion ($1.9 billion). Marfrig expects the Moy Park sale to be finalized between the third and fourth quarters of this year. Brazil’s second largest beef processor, Marfrig, will remain a global company after offloading Moy Park, with 75 percent of its revenue tied to currencies other than the Brazilian real, the company said.
