A Delaware judge refused to dismiss a shareholder lawsuit over Pilgrim’s Pride’s acquisition of Moy Park, a suit in which minority shareholders challenged the fairness of the transaction.
Pilgrim’s Pride, a U.S. based poultry company, acquired Moy Park, a Northern Ireland-based poultry company in 2017 from Brazil-based JBS, for US$1.3 billion. According to the WATTAgNet Top Poultry Companies Database, JBS, the world’s largest poultry company, owns a 78.5 percent stake in Pilgrim’s Pride.
At the time of the acquisition, Pilgrim’s Pride CEO Bill Lovette, said, “Moy Park strengthens Pilgrim's' leading portfolio of brands and brings strong value-added innovation capabilities, access to new markets, a best-in-class production platform and strong farmer partner relationships.”
In the lawsuit, which was filed in the Court of Chancery of the State of Delaware, the plaintiffs are suing JBS and five members of the JBS Board of Directors. The lawsuit claims that because JBS controlled both Pilgrim’s Pride and Moy Park, it must prove that the deal was entirely fair, according to an Associated Press report published on the Washington Post website.
The plaintiffs allege that JBS orchestrated a deal to sell Moy Park to Pilgrim’s Pride because it needed to raise cash quickly after agreeing to pay a US$3.2 billion fine to the Brazilian government after former JBS Chairman Joesley Batista, and his brother, former JBS Chief Executive Officer Wesley Batista, admitted to bribing politicians.
The Batista brothers resigned from their leadership positions with the company in 2017. Their father, José Batista Sobrinho, is the namesake and founder of the company.
Pilgrim’s Pride, which also has operations in Mexico, is the second-largest poultry company in the United States, trailing only Tyson Foods. Moy Park is the second-largest poultry company in the United Kingdom and the eighth-largest poultry company in Europe, according to the Poultry International Top Poultry Companies survey. 2 Sisters Food Group is the U.K.’s largest poultry company.
