Brazil-based JBS S.A., through its U.S. subsidiary JBS USA Holdings, Inc., is set to acquire a majority stake in the chicken processor Pilgrim's Pride Corp.
Under the terms of the agreement, Pilgrim's Pride will sell 64% of the new common stock of the reorganised Pilgrim's Pride following its emergence from Chapter 11 bankruptcy protection, tentatively scheduled for December, to JBS for $800 million in cash. The two companies plan to file a joint reorganization plan in the U.S. Bankruptcy Court for the Northern District of Texas.
Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS, currently the world's largest beef producer and exporter, will be used to pay cash distributions to allowed claims under the plan. Under the terms of the plan, all creditors of the debtors holding allowed claims will be paid in full, either in cash or by issuance of a new note.