French court approves partial offers for Doux sites

A French court has approved the partial offers for five of eight sites operated by Doux Frais, the fresh produce division of indebted poultry group Doux, which is now in line to be partially acquired by Barclays.
Doux Frais was placed under a liquidation order on August 1 but was allowed to continue trading until September 10 so potential buyers could emerge, according to reports. The Doux Frais site in Pleucadeuc, France, has been acquired by Galina Doux, and the plants in Laval and Sérent have been acquired by LDC. Glon Sanders (Sofiprotéol), in association with Duc, have acquired the plants in Boynes and Blancafort. No bids were submitted for the other the sites.

Barclays to assume control of poultry group Doux

Bank Barclays will assume control of indebted poultry group Doux in mid-September, according to reports, acquiring an 80 percent stake in the company in exchange for forgiving debt of €140 million (US$175 million).
The plan, which received implicit backing from a French court on Aug. 1, will allow the bank to come up with a turnaround plan for Doux. "The transformation of Doux's Barclays debt into 80 percent of its capital should be implemented on Sept. 10," said Raymond Gouiffes of the CGT union.
In the meantime, a French commercial court has ordered the liquidation of Doux's fresh poultry operations, and the court is due to review the five offers made on Sept. 5.

Cal-Maine Foods acquiring egg assets of Pilgrim's

Egg producer and packer Cal-Maine Foods Inc. has reached an agreement to acquire the commercial egg operations of Pilgrim’s Corporation.
The assets to be purchased by Cal-Maine Foods include two production complexes with capacity for approximately 1.4 million laying hens and adjacent land located near Pittsburg, Texas. “These production facilities will complement our existing operations in Texas and the additional capacity will enhance our ability to serve our customers in the Texas markets," said Dolph Baker, president and CEO of Cal-Maine Foods. "We welcome this opportunity for the continued growth of our business and the ability to provide greater value for our customers and shareholders.”
The company expects to close the transaction in August.

Ten takeover bids submitted for Doux

Ten takeover bids by seven groups have been submitted for French poultry exporter Doux, including bids by Daviet, Cavac Ciab, Financière Turenne Lafayette, LDC, Sofiprotéol, Tilly-Sabco and Terrena.
Sofiprotéol is leading a consortium that submitted a bid for Doux and brings together Sofiprotéol's subsidiary Glon Sanders, Duc, LDC, Terrena, Tilly-Sabco and Triskalia. In addition, Doux's current shareholders have submitted a plan to keep the indebted business running. "It's our understanding that the judicial administrators will use the period between now and the week commencing 23 July to incite the bidders to improve their offers ahead of an audience at the Paris commercial court scheduled to be held before the end of the month," said a Doux spokesman.
The current prediction is that judicial administrators will favor a global bid for the company, which will retain the maximum number of jobs and allow Doux to meet its commitments to its creditors.

Mountaire Farms discontinues purchase of Allen Family Foods

Mountaire Farms has withdrawn its efforts to purchase the assets of bankrupt Delaware poultry company Allen Family Foods.
Mountaire originally expressed plans to purchase the company after Allen filed for Chapter 11 bankruptcy in June. Mountaire would have acquired hatcheries, a feed mill, breeder operations, rendering operations and production assets.
On July 18, South Korea-based Harim Corp. indicated that it would bid for Allen as part of its own expansion efforts. Allen's official bankruptcy auction will be held on July 28 at U.S. Bankruptcy Court in Wilmington, Del.

Perdue cleared to acquire organic poultry processor

Perdue Farms Inc.'s parent company, FPP Family Investments, has been cleared by the U.S. Department of Justice's Antitrust Division to purchase organic and natural poultry processor Coleman Natural Foods.
According to the Department of Justice, which interviewed customers, chicken processors and more than 100 chicken growers, "after a thorough review of the evidence...the facts do not support challenging the proposed transaction." The Antitrust Division said that it does not believe the proposed buyout will cause the poultry industry any harm.

George's plans to buy Tyson Foods Va. poultry complex

George’s Inc. has signed a letter of intent to buy the Tyson Foods Inc. poultry complex in Harrisonburg, Va., officials from both companies have announced.  
The sale price has not been disclosed; however, representatives from both companies said they hope to complete the deal soon, pending execution of a definitive agreement and completion of customary closing conditions. “We believe Tyson’s Harrisonburg complex will be a good fit for our company, complementing our existing poultry operations in Harrisonburg and nearby Edinburg,” said Gary George, Chairman and CEO of George’s. “We don’t plan to make any immediate changes and expect to retain substantially all of the people currently employed by Tyson at Harrisonburg. It’s also our intention to honor the contracts Tyson has with the 121 contract farms that raise chickens for the complex.”
Tyson’s Harrisonburg complex currently employs more than 500 people. Operations include the processing plant in Harrisonburg and a hatchery in Broadway, as well as a feed mill and truck shop in New Market. “Harrisonburg has been an important part of Tyson for many years and has a great workforce; however, we believe it makes economic sense for us to sell the plant and divert more of our resources to some of our other operations,” said Donnie King, senior group vice president of Poultry and Prepared Foods for Tyson. 
The Harrisonburg complex was among the poultry operations Tyson acquired in 1989, when it purchased Holly Farms. The complex currently produces commodity boneless and whole bird chicken as well as chicken leg quarters for sale to retail, foodservice and international customers. The potential sale does not affect Tyson’s other operations in Virginia, which include poultry production complexes at Glen Allen and Temperanceville.

Agency restricts Brasil Foods takeover

Shares of poultry exporter Brasil Foods SA stock plunged after regulators recommended it sell assets prior to taking over rival Sadia SA. The stock dropped more than 6% according to a report in Bloomberg Businessweek.
The drop follows recommendation by the antitrust arm of Brazil’s Finance Ministry that the company license one of its two main brands for at least five years or sell a block of assets before it will approve the takeover.
The ministry agency, known as SEAE, expressed concern over “significant concentration” in fresh beef and industrialized products markets, and said the deal would also narrow poultry and turkey slaughtering in some parts of Brazil.

All quiet on the Brazilian front

While the recent purchase of the U.S.’s Pilgrim’s Pride by Brazilian meat processor JBS has received a lot of coverage in the U.S., the reaction in Brazil has been much more subdued.
According to Fabio Nunes, consultant and expert on the Brazilian poultry industry, “I think that the Brazilian meat companies – poultry, pork and beef – are still trying to figure out what the short-, mid-, and long-term effects will be of these acquisitions for the Brazilian and the international markets.
“Presently the only press/public ‘reaction’ has come from the government side, due to its promising domestic and international perspectives.
“If we take a look at the production portfolio of JBS/Pilgrim’s only, the Brazilian companies dealing with chicken and pork seem to be immune locally, but may well be affected by Pilgrim’s presence in the international chicken meat market.
“However, when you add Bertin’s portfolio to JBS’, then you are looking at competing in other market segments, like dairy, where poultry companies like Brasil Foods (Perdigao) are also very active. This seems to forecast a future guerrilla war in different segments with different competitors,” Nunes says.
Regarding the possibility of JBS getting into the poultry sector in Brazil, Nunes observes, “JBS is a very low-profile company. Investing in the chicken business in Brazil is a real possibility, but we’ll only know of the deal at the very last moment.
“Among the top local poultry companies only Doux Frangosul has some attractiveness, holding about 6% to 7% of Brazil’s annual slaughter. However, Doux made it clear recently that it is not for sale.”
As to the reaction from Brazilian consumers, Nunes says, “I don’t think Brazilian consumers are aware of what happened in terms of business magnitude, or the impact on the market. Beef in Brazil still is massively sold in butcher shops or meat counters in supermarkets and mostly tray-packed and unbranded. They may well come from these big guys, but it is unknown to the regular consumers.
“However, the supermarket sector is very much aware of the impact of these mergers in the long run. The increased concentration of these businesses on all fronts – chicken, pork, beef, dairy, further processed products - will narrow their portfolio of high- and mid-end suppliers in Brazil that may well reduce their negotiation power,” he says.

JBS purchases Pilgrim's Pride

In its pending Chapter 11 case, Pilgrim's Pride announced JBS will purchase 64% of the company's stock for $800 million in cash.
Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS will be used to fund cash distributions to allowed claims under the plan. Under the terms of the plan, all creditors of the debtors named in the case will be paid in full. All existing Pilgrim's Pride common stock will be cancelled and existing stockholders will receive the same number of new common stock shares representing 36% of the reorganized Pilgrim's Pride in aggregate.
The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of $1.75 billion to be provided by a group of lenders arranged by Joint Lead Arrangers CoBank, ACB and Rabobank.
Pilgrim's Pride said it expects the plan to be confirmed by the Bankruptcy Court in time for debtors to emerge from bankruptcy before the end of December.
"Over the past 10 months, we have fundamentally restructured Pilgrim's Pride as a market-driven company clearly focused on delivering the best service, selection and value to our customers as efficiently as possible," said Don Jackson, president and chief executive officer.
The plan and the proposed disclosure statement have yet to be approved by the Bankruptcy Court and are subject to further negotiations with stakeholders.
Pilgrim's filed voluntary Chapter 11 Dec. 1, 2008, and its operations in Mexico and certain operations in the U.S. were not included in the filing and continue to operate as usual.

Tyson buys Miss. poultry rendering company

Tyson Foods announced it has completed the acquisition of Central Industries, a poultry byproducts rendering company in Forest, Miss., which produces raw materials used to produce pet food and other animal feeds, as well as biodiesel.
Tyson previously held a 49% ownership position in Central Industries.
"We believe 100% ownership will enhance the efficiency of the business and generate a greater financial return," said Jeff Webster, group vice president of Tyson's Renewable Products Division. "It will also give our rendered products business greater access to the southeastern U.S. market."
Tyson officials currently expect to make very few changes in total employment at the Central Industries plant, which currently has about 180 people on staff.
Terms of the acquisition were not disclosed.