Brazil's JBS To Announce Deal To Buy Pilgrim's Pride

By JEFFREY MCCRACKEN and LAUREN ETTER

Brazilian beef giant JBS SA is set to announce as soon as next week the acquisition of Texas-based Pilgrim's Pride Corp. for a price of roughly $2.5 billion, say several people familiar with the matter. The deal would pull the second-largest chicken company in the U.S. out of bankruptcy court and shake up the global meat business.

The deal was in the final stages of negotiation Wednesday and may yet fall apart. But if it moves ahead as expected, it would create a new U.S. rival to Tyson Foods Inc., which is the biggest U.S. meat company that produces beef, chicken and pork. Combined, Pilgrim's Pride and JBS's U.S. unit -- which includes sales at the JBS business in Australia -- would have posted $20 billion in revenue last year. Tyson's fiscal 2008 revenue was $26 billion.

A JBS-Pilgrim deal would probably attract scrutiny from antitrust enforcers, who have said they plan to take a hard look at competition in the agriculture business. Any deal is sure to raise concerns across U.S. farm country. Some ranchers and chicken farmers are worried that greater concentration in the industry could decrease their power in the market and translate into lower prices for their animals in the long run.

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