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JBS Gets Ready to Fight for National Beef

23 October 2008

BRAZIL - JBS announces its plan to immediately complete the purchase of "Smithfield Beef" while vigorously defending the Department of Justice lawsuit seeking to block the purchase of National Beef.

Wesley Batista, JBS USA's President and CEO, said that he disagrees with the Department of Justice's decision to try and block the transaction. "This transaction is highly pro-competitive and will generate significant efficiencies and synergies that will benefit our cattle suppliers and our beef customers", he said, adding that JBS believe the government's case is misplaced.

On March 5, 2008, JBS announced the acquisition of National Beef for a total enterprise value of approximately US$970 (nine hundred and seventy) million. Under the terms of the Membership Interest Purchase Agreement, JBS will acquire all of the outstanding membership interests of National Beef. JBS will then pay the members of National Beef total proceeds of approximately US$465 (four hundred and sixty five) million cash and US$95 (ninety five) million in JBS common stock.

JBS say that they will assume all of National Beef's debt and other liabilities at closing. The sale will combine all of National Beef's operations and facilities, including National Carriers, Inc., and its ownership in Kansas City Steak Company, LLC with JBS-Swift's beef operations.

The “Smithfield Beef” Transaction

JBS S.A. have announced that it plans to immediately complete the purchase of Smithfield Beef, the beef processing and cattle feeding operations of the Smithfield Group, for approximately US$565 (five hundred and sixty five) million in cash.

The deal will be paid using Company funds. The purchase includes 100 percent of Five Rivers Ranch Cattle Feeding LLC (“Five Rivers”), which was previously a 50/50 joint venture with Continental Grain Company (“Continental Grain”). Five Rivers will continue as a service provider, fattening cattle for a negotiated fee for third parties.

Further Reading

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