Marfrig Global Foods has plans to sell Keystone Foods, the tenth largest poultry company in the United States, while it is also purchasing a majority share of National Beef Packing Company, the fourth largest beef processor in the U.S.
Marfrig Global Foods, headquartered in Brazil, announced its intent to purchase 51 percent of National Beef, headquartered in Kansas City, on April 9. Marfrig has agreed to pay $969 million for the National Beef shares. In the same press release in which Marfrig announced its National Beef acquisition plans, the company revealed that it was planning to sell its Keystone Foods subsidiary as a measure to deleverage Marfrig.
The announcement came just days after Marfrig Global Foods released its financial results for the fourth quarter of the 2017 fiscal year. Keystone Foods saw a 1 percent year-over-year drop in net revenue and a 5 percent drop in volume. However, that drop came amid a period where weather caused disruptions throughout the supply chain and production experienced some downtime for production modifications that were said to later improve operational flexibility and efficiency.
Marfrig Global Foods in May 2017 revealed its intention to sell a portion of its holdings of Keystone Foods as part of an initial public offering (IPO), but that IPO has not occurred.
Keystone Foods, according to the WATTAgNet Top Poultry Companies Database, has been owned by Marfrig since 2010. In 2017, Keystone Foods processed 29.8 million pounds of ready-to-cook chicken on a weekly basis. Keystone Foods not only supplies retailers and foodservice providers with poultry products, but also pork, beef and fish products.
Marfrig Global Foods is also the former owner of European poultry company Moy Park. It sold Moy Park to rival Brazilian company JBS for $1.5 million in 2015. JBS went on to sell Moy Park to Pilgrim’s Pride in 2017.
