JBS Abandons National Beef Acquisition
Company vows to boost efficiencies at all other U.S. operations.
Compiled by staff
Published: Feb 20, 2009
JBS S.A. announced Friday that it has terminated the acquisition process of National Beef Packing Co. LLC, effective Feb. 23.
In a statement, the Brazilian beef giant said all related litigation with the Department of Justice also will be terminated.
JBS announced its intention to acquire National Beef on March 4, 2008. The Department of Justice filed a suit to block the deal on Oct. 20, 2008, on competition grounds.
"JBS endeavored to encounter a solution with the parts involved, but in the absence of satisfactory conditions decided not to follow on with the acquisition," the company statement said.
JBS became the No. 3 U.S. beef producer in October 2008 when the DOJ approved its purchase of the beef operations of Smithfield Foods, which included four beef plants and the Five Rivers Ranch cattle-feeding operation, but held back on approving the National Beef deal. The company had been negotiating with the agency to try to work out a compromise since.
Focus on efficiency. JBS said it will continue to pursue further efficiencies at all its other units within the United States, which consist of eight cattle slaughter plants with a daily capacity of 28,100 head; three pork slaughter plants with a daily capacity of 47,900 head; 11 cattle feed yards in six states; a case-ready plant and a lamb slaughter plant as well as related operations in Australia, Italy, Argentina and Brazil, where its headquarters are located.
BS S.A. is currently the world's largest beef producer and exporter with a daily slaughter capacity of 65,000 head of cattle per day and the largest global exporter of processed beef. The company's operations include 22 plants located in nine Brazilian states, six plants located in four Argentine provinces, 16 plants in the United States, nine in Australia and 10 in Italy.
Opposing groups are pleased. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America is pleased that JBS has abandoned its bid to take over National Beef
Organization for Competitive Markets Executive Director Fred Stokes said this news is extremely welcome and represents a very positive start on what will be a long, hard fight to restore competition to the U.S. cattle market that has already been lost due to previous mergers which resulted in the U.S. cattle market being one of the most concentrated markets in the U.S. economy.
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