Market News & Headlines >> Tyson to Sell Mexico, Brazil Poultry Operations
Tyson Foods Inc. on Monday announced it had agreed to sell its poultry businesses in Mexico and Brazil to JBS SA for $575 million in cash, which will be used to help pay down debt from its recently announced acquisition of Hillshire Brands.
Donnie Smith, president and CEO of the Springdale, Arkansas meat processor said in a press release that Tyson still had long-term plans to expand its international operations, especially in Asia, but the businesses it will sell “haven’t had the necessary scale” to gain leading positions in their markets.
Tyson Foods officials expect the sale, which is subject to regulatory approval, to be completed by the end of 2014. 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.
Tyson announced the sale on the same day it reported fiscal third-quarter earnings climbed more than 4.4% to a record high 75 cents per share. The earnings fell 3 cents short of the consensus of analysts’ expectations, although the company’s quarterly revenues exceeded the trade consensus. Tyson also announced new offerings of 24 million shares of common stock and 30 million tangible equity units on Monday.
Tyson said Friday that it would close three facilities it acquired in the 2001 purchase of beef and pork processor IBP Inc. ahead of its purchase of Hillshire Brands. The company will close its Cherokee, Iowa, plant effective Sept. 27. Its Buffalo, N.Y., and Santa Teresa, N.M., sites are expected to close during the first half of calendar 2015.