Tyson Foods Inc. to Sell Mexico, Brazil Poultry Operations to Handle Debt From Hillshire Brands Purchase
On Monday, Tyson Foods Inc. announced its selling of its poultry businesses in Mexico and Brazil.
According to a press release by the company, the businesses will be sold to JBS SA for $575 million "paid for in cash." The Springdale, Arkansas-based company expects the deal to be done by 2014's end after it is approved.
"Although these are good businesses with great team members, we haven't had the necessary scale to gain leading share positions in these markets," Donnie Smith, president and CEO of Tyson Foods, said in the release.
Tyson bought Hillshire Brands, the maker of such meat products as Ball Park Franks hot dogs and Jimmy Dean sausages for $7.75 billion in early July, according to The Associated Press.
"In the short term, we'll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands," Smith said. "Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence."
Pilgrim's Pride, which is owned by JBS USA Holdings Inc., the parent company of JBS SA, is to acquire Tyson de México, Tyson's Mexican business. The business is based in Gomez Palacio and employs over 5,400 people.
Meanwhile, Tyson's Brazil business, Tyson do Basil, will be acquired by a combination of three production plants. Two of them are in Santa Catarina, and one of them is in the Brazilian state of Parana. The business has 5,000 employees.
According to AP, the new owners of Tyson's Mexican and Brazilian operations will adhere to all current operational and labor contracts.
The press release added that the poultry company "will continue to serve customers in Mexico" with chicken produced in both the United States and Mexico thanks to a "co-packaging arrangement with Pilgrim's Pride."
As two of its Latin America based businesses are sold, Tyson will continue to grow its business in Asia. Currently, Tyson has three poultry plants in China and majority ownership in two Indian plants. The company employs 5,000 people in Asia in total.
---
Follow Scharon Harding on Twitter: @ScharHar.
Subscribe to Latin Post!
Sign up for our free newsletter for the Latest coverage!
* This is a contributed article and this content does not necessarily represent the views of latinpost.com