SPRINGDALE, Ark., July 28, 2014 (GLOBE NEWSWIRE) -- Tyson Foods, Inc. (NYSE:TSN) has reached a definitive agreement with JBS SA (BM&FBovespa –Novo Mercado:JBSS3) (OTCQX:JBSAY) to sell its poultry businesses in Mexico and Brazil, the company announced today.
The transaction is valued at $575 million and will be paid for in cash. Tyson Foods officials currently expect the sale, which is subject to regulatory approval, to be completed by the end of 2014. JBS and Pilgrim's Pride currently expect to maintain all the operations working to capacity with the existing workforce and to maintain all labor contracts in both countries.
"Although these are good businesses with great team members, we haven't had the necessary scale to gain leading share positions in these markets," said Donnie Smith, president and CEO of Tyson Foods. "In the short term, we'll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands. Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence."
Tyson Foods' Mexican business will be acquired through Pilgrim's Pride, whose majority owner is JBS USA Holdings, Inc., a wholly owned subsidiary of JBS SA. The Brazilian business is to be acquired through JBS Foods, also a wholly owned subsidiary of JBS SA.
The Mexican business, known as Tyson de México, is a vertically integrated poultry business based in Gomez Palacio in North Central México. It has three plants and employs more than 5,400 team members in its plants, offices and seven distribution centers.
The acquisition of Tyson's Brazil operations, known as Tyson do Brasil, involves three fully integrated production plants, two in Santa Catarina and one in the state of Parana. Tyson do Brasil employs 5,000 team members.
Tyson Foods will continue to serve customers in Mexico. The company will supply them with U.S.-produced chicken as well as chicken produced in Mexico, in part through a co-packaging arrangement with Pilgrim's Pride.
Tyson Foods' intends to remain focused on growing its poultry operations in Asia, which include three poultry plants in China and majority ownership of two poultry plants in India. Combined, these Asian operations employ approximately 5,000 people.
About Tyson Foods
Tyson Foods, Inc. (NYSE:TSN), with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company was founded in 1935 by John W. Tyson, whose family has continued to be involved with son Don Tyson leading the company for many years and grandson John H. Tyson serving as the current Chairman of the Board of Directors. Tyson Foods produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. The company provides products and services to customers throughout the United States and approximately 130 countries. It has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson Foods strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
Forward-Looking Statements
This communication contains certain forward-looking statements with respect to certain plans and objectives of Tyson Foods with respect to sale proceeds and international growth. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aim", "continue", "will", "may", "would", "could" or "should" or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans to differ materially from those expressed or implied in forward-looking statements. Among the factors that may cause actual results and experiences to differ from anticipated results and expectations in forward-looking statements are the following: the risk that regulatory approval of the sale of the Mexican and Brazilian businesses is not granted by the appropriate authorities; the risk that a regulatory approval could only be obtained subject to conditions that are not anticipated; and the risk that we do not successfully execute our growth plans in international markets. Tyson Foods does not assume any obligation to update the information contained in this communication (whether as a result of new information, future events or otherwise), except as required by applicable law.