Source  Tom Johnston, MEATINGPLACE.COM, 9/16/09

Pilgrim's Pride Corp. on Wednesday announced that under a reorganization plan filed under Chapter 11 bankruptcy the company will sell 64 percent of its new common stock to JBS S.A. for $800 million in cash.

The overall transaction, which JBS S.A. is executing through its JBS USA Holdings Inc., represents an enterprise value of some $2.8 billion. If approved, the deal would make JBS USA a direct rival to Tyson Foods Inc., currently the only major U.S. meat company to produce beef, pork and poultry.

Pilgrim's said in a statement that proceeds from the sale of stock will be used to fund cash distributions to creditors in cash or new notes. Meanwhile, existing shareholders will own 36 percent of the reorganized firm.

Pilgrim's expects to emerge from bankruptcy before the end of December, a year after it originally filed for Chapter 11 protection.

"Thanks to the shared commitment and hard work of our employees, we believe that Pilgrim's Pride is positioned to emerge from bankruptcy as a stronger, more efficient competitor," Pilgrim's President and CEO Don Jackson said. "We have returned to profitability, the quality of our asset base has improved significantly and we are gaining additional business. While we recognize that some of the changes made during our restructuring have been painful for our employees and contract growers, these decisions were absolutely necessary in helping Pilgrim's Pride to operate more efficiently while protecting the greatest number of jobs in the long-term."

A Brazil-based beef specialist, JBS S.A.'s purchase of Greeley, Colo.-based Swift Foods Co. two years ago marked the company's first foray into pork. With the Pilgrim's deal, it becomes majority owner of the nation's largest poultry producer.

"We are proud to now enter into the U.S. poultry industry with the acquisition of Pilgrim's Pride," JBS USA CEO Wesley Batista said. "We look forward to working with Pilgrim's management to increase the company's competitiveness both domestically and internationally. As we have accomplished with our beef and pork platforms, we will utilize our existing assets and strong management to grow Pilgrim's poultry business."

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