PITTSBURG, TEXAS — 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 reorganized 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 today.

Proceeds from the sale of the new common stock of the reorganized Pilgrim’s Pride to JBS 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. 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.

"Looking ahead, we are truly excited about the strategic growth opportunities available with JBS as our majority shareholder," said Don Jackson, president and chief executive officer of Pilgrim’s Pride. "JBS has a well-earned global reputation for operational and service excellence in beef and pork production. We are confident that our plan will earn the support of all stakeholders and provide the foundation for sustained, profitable growth in the years ahead."

If approved by the bankruptcy court, JBS’s majority stake in Pilgrim’s Pride will represent the company’s third major investment in the U.S. meat and poultry industry. In 2007 the company acquired Swift & Co. and in 2008 it acquired Smithfield Beef and the Five Rivers Cattle Feeding operation.

"As a U.S. beef and pork company, we are proud to now enter into the U.S. poultry industry with the acquisition of Pilgrim’s Pride," said Wesley M. Batista, president and chief executive officer of JBS USA Holdings. "We look forward to working with Pilgrim’s management to increase the company's competitiveness both domestically and internationally. As we have accomplished with our beef and pork platforms, we will utilize our existing assets and strong management to grow Pilgrim’s poultry business. We are excited about the opportunity to work with Pilgrim’s employees, contract growers, customers, vendors and shareholders to enhance value."

Both companies emphasized the plan and the proposed disclosure statement has not been approved by the bankruptcy court and is subject to further negotiations with stakeholders.