While the African swine fever outbreak has the potential to impact Pilgrim’s Pride, the company’s global CEO said the outbreak was not a consideration when it entered a contract to purchase the largest pig producer in the United Kingdom (U.K.).
The U.S.-based company announced on August 28, its intent to purchase Tulip Limited from Danish Crown, Europe’s largest pork processor. The transaction is valued at GBP290 million (US$354 million)
With pig losses mounting in Asia and parts of eastern Europe, but no positive ASF detections in the U.K. to date, Pilgrim’s could see some financial benefits with the addition of Tulip, which operates 12 production facilities throughout the U.K.
During a conference call in which the deal was announced, Fabio Sandri, chief financial officer of Pilgrim’s Pride, acknowledged “African swine fever could be an opportunity for these assets,” adding that because Tulip is an integrated operation, it is not as dependent on markets as operations that aren’t as integrated.
However, Jayson Penn, global CEO of Pilgrim’s, clarified that ASF was not a motivating factor behind the pending acquisition.
“We’re not interested in these assets due to African swine fever. We believe in this business, we believe in the team here and we believe in their plan,” said Penn. “If African swine fever becomes a situation here, that’s an upside, but we didn’t factor that into the decision-making process to acquire this business.”
The Tulip transaction will be Pilgrim’s Pride’s second acquisition of a European animal protein business. In 2017, it acquired Moy Park, based in Northern Ireland, from JBS. JBS is also the majority shareholder of Pilgrim’s Pride.
Penn, in announcing the company entering a contract with Danish Crown concerning the acquisition, said: “We are pleased to strengthen our European foods platform with the acquisition of Tulip Limited, which positions Pilgrim’s as a leading global prepared foods player.”
View our continuing coverage of the African swine fever outbreak.
