JBS has concluded the sale of its stake in Brazilian dairy and food company Vigor Alimentos to Mexican dairy company Grupo Lala.
According to a material fact posted on the JBS website, JBS sold its 19.43 percent shareholding interest in Vigor for an enterprise value of about BRL1.1 billion (US$340 million), of which JBS will receive an equity value of about a BRL786 million (US$243 million).
JBS, the world’s largest broiler processor and second-largest pig processor, stated that it will use a portion of the transaction’s proceeds to reduce its debt.
The stake in Vigor Alimentos was one of several assets identified by the company in another material fact, posted on June 20, as part of a divestment program of “non-core and less strategic assets.”
Other recent JBS divestiture activity
Also included in the divestment program were JBS’ share in Northern-Ireland based poultry company Moy Park and North America’s Five Rivers Cattle Feeding.
Pilgrim’s acquired Moy Park in September for an estimated US$1.3 billion. No buyer has yet emerged for Five Rivers Cattle Feeding.
JBS has also divested of its beef assets in Argentina, Paraguay and Uruguay to Minerva for a price of about US$300 million.
The divestitures began shortly after JBS became implicated in a corruption scandal in which former leaders Wesley Batista and Joesley Batista, brothers who respectively were CEO and chairman of JBS, admitted to bribing Brazilian politicians.
Wesley has been succeeded by his father and the founder of JBS, José Batista Sobrinho, who is also a member of the JBS board. Joesley was succeeded by Tarek Farahat, who has since been succeeded by Jeremiah O’Callaghan.
The Batista brothers have been incarcerated on suspicion of insider trading and market manipulation. The duo allegedly tried to minimize losses “through the purchase and sale of shares and profited by buying dollars based on privileged information” they obtained during a plea bargaining deal connected to the bribery scandal.
