Advertisement

News and analysis on the global poultry
and animal feed industries.

Poultry Around the World

Mark Clements' view of the world poultry industry with a British twist.

Weak economy increases poultry company takeovers

June 17, 2011

Is bigger always better? The competition commission in Brazil may not think so with regard to Brasil Foods -- the food giant created at the height of the financial crisis but that now might be facing the prospect of being slimmed down.

However, things might be going in the opposite direction in the Northern Hemisphere. A new report suggests that one in seven companies in the poultry industry could change hands as a result of the economic climate.

The report, published by Plimsoll, says: “Any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers’ market out there for cash-rich companies.”

Analysts regard the poultry industry as one of the UK’s most fragmented sectors and have identified 117 companies that are prime to be taken over. Plimsoll analysts have identified 71 companies that have sizeable cash reserves sat on their balance sheets that, due to record low interest rates, is generating nothing, and so are in a position to buy up chunks of their market to make the cash work.

Possible changes to Brasil Foods should be known within the next few days, while those affecting the UK poultry industry could take longer. Watch this space!

Comments powered by Disqus