Moy Park: Northern Ireland's biggest employer sold in £1bn deal to another Brazilian food group
Northern Ireland's biggest employer Moy Park has been sold for $1.5bn (£945m) to Brazilian food group JBS S.A.
The UK's biggest poultry producer, which has its headquarters in Craigavon, has owned by another Brazilian-based company, Marfrig Group since 2008.
The purchase came as a shock as rumours have abounded over the last 12 months that Marfrig would float Moy Park on the London Stock Exchange.
JBS said it expects to complete the purchase in the second half of 2015 and is subject to approval from European Union antitrust authorities.
Moy Park employs 8,473 people in Northern Ireland and last year its pre-tax profits rose by 39% to £33.7m
In a statement Jeremiah O’Callaghan JBS S.A. investor relations officer said:
“The Moy Park acquisition was valued at $1.5bn (£945m), adjusted by the working capital variation, as well as by the net debt of the Moy Park business at the conclusion of the transaction, which includes £300m in Notes due in May 2021. The balance will be paid in cash at the conclusion of the acquisition.”
JBS S.A. started to expand its international operations in 2007 in North America, but this is the first time the company has looked to the European market.
“This transaction represents an important step in JBS’ strategy to grow its portfolio of prepared and convenient products with high value added,” Mr O'Callaghan said.
“In addition, this acquisition increases the Company’s geographic diversification, with an expansion of its operations in Europe in a relevant manner.
“The transaction was approved by the Board of Directors of JBS and it is subject to the regulatory approvals, including the European Union antitrust authorities. JBS management will keep the market informed about the development of this transaction until its conclusion, which is projected to happen in the second half of this year.”
Marfrig said it sold Moy Park to reduce its debts.
“The use of the proceeds from this transaction is to reduce leverage.“The transaction significantly improves Marfrig's capital structure, accelerating the expected reduction in its financial leverage and the associated interest expense."
It added the sale will allow it to focus on its existing operations in the US and Asia.
“The sale of Moy Park will enable Marfrig to have a greater focus in pursuing growth opportunities identified in its strategic plan “Focus to Win”.“The resulting Marfrig becomes a company with a stronger focus in food service, with greater flexibility to pursue existing opportunities in this market, mainly in the US and Asia.”