If the truck that hit you turned into a 100-car freight train before you could get it into court, would that be a good thing?
The youngsters who were infected with E. coli O157:H7 after eating meat produced at the JBS Swift & Co. Greeley Beef Plant might be wondering about changes going on in the U.S. meat industry. So might their parents.
JBS USA, which has owned Swift for only two years, is a driving force behind concentration in the meat industry.
As it stands now, JBS is No. 3 in beef and pork in the United States; and is making a move to be No. 2 in poultry with a $800 million cash investment in Texas-based Pilgrim’s Pride. For the money, Pilgrim’s Pride will give JBS 64 percent of its stock as the reorganized company emerges from bankruptcy.
Pilgrim’s Pride filed for Chapter 11 protection under the Bankruptcy Act last December when high feed prices, a poultry glut, and heavy debt load forced its hand.
Its transaction with JBS has “an enterprise value” of $2.8 billion, according to Pilgrim’s. The nation’s No. 2 poultry processor will now pay creditors in full, and be out of bankruptcy before the end of 2009.
When beef, pork, and poultry are combined, Tyson Foods is America’s No. 1 meat company. But with its purchase of a majority of Pilgrim’s stock, JBS USA will be close behind as No.2.
JBS growth through acquisition is nothing new. When it bought Swift & Co. in 2007, it paid $225 million in cash and assumed a debt load estimated at more than $1 billion. Last year, it acquired processor Smithfield Beef from Smithfield Foods for $565 million.
Bertin, another Brazilian beef company, last week merged into JBS S.A., further strengthening the world’s largest beef producer and making it highly unlikely that the Pilgrim’s acquisition will be its last.
The JBS Greeley Beef Plant last June recalled 421,280 pounds of beef products for contamination with E. coli O157:H7. The tainted meat is blamed for infecting at least 23 people in nine states.
Victims in Colorado, Wisconsin, and Washington State have filed personal injury lawsuits against the growing meat giant.© Food Safety News