JBS SA may reveal its intentions this Friday over how to complete its acquisition of National Beef Packing. JBS has been in discussions with the Justice Department, which has filed a complaint to block the $970M deal. The parties will meet Friday at an initial hearing before the U.S. District Court in Chicago, which is hearing the complaint. As previously reported (CBW, December 22, 2008), JBS has various options open to it. It might offer to divest one or more plants, decide to argue its case before the court or sit back and see what happens.
One reason JBS is so keen to acquire National is that it has consistently made money over the past five years and has outperformed beef packers much larger than it. National had net income of $124.5M in fiscal 2008 (ended Aug. 30). That was the best year in its history. Tyson Foods, which processes twice as many fed cattle as National, had operating income for beef in fiscal 2008 (ended Sept. 27) of $131M.
Steve Kay is editor and publisher of Petaluma, Calif.-based Cattle Buyers Weekly. For more information, go to: www.cattlebuyersweekly.com.