News of mergers and acquisitions (M&A) has always seemed to attract a lot of attention from readers, and there was plenty of that sort of news on the WATTPoultry.com website during 2021.
And many of those news developments have not come to a conclusion by the end of 2021, which leads me to wonder what 2022 will look like.
We do a roundup of the M&A activity each month, and if you click on those articles, which also include M&A activity in the feed industry, you will see there has typically been a lot of activity on those fronts. It would be difficult to do a recap of all of those stories at the end of the year, so I’ll highlight some of the most compelling M&A stories of 2021.
Pending Wayne Farms-Sanderson Farms merger
After several months of speculation that this was in the works, it was announced in August that an agreement had been reached that Sanderson Farms, the third largest poultry company in the United States, would be sold and merged with Wayne Farms, the seventh largest poultry company in the U.S. Continental Grain Company, the owner of Wayne Farms, entered into a joint venture with Cargill to make the purchase, and Clint Rivers, CEO of Wayne Farms, was selected to be the CEO of the combined company.
There has been some pushback on this proposed merger, as some government officials and farmer organizations have expressed anticompetitive concerns. That merger remains in limbo, as the U.S. Department of Justice has requested more information as it reviews the potential transaction.
Sanderson Farms is headquartered in Laurel, Mississippi, where Wayne Farms already operated a poultry complex. In an apparent effort to put anticompetitive concerns to rest, Wayne Farms opted to divest of its Laurel complex, selling it to Amick Farms.
Growth of JBS
JBS is already the world’s largest poultry producer, and a global powerhouse in the pork and beef industries. It took numerous steps during 2021 to become even larger in those industries, as well as in the alternative protein industry.
During the past 12 months, the Brazil-based company announced either its intent to purchase, or the completion of the purchase of Italian meat company King’s Group, California’s Sunnyvalley Smoked Meats, Australian businesses Rivalea Holdings and Oxdale Dairy Enterprise, Dutch plant-based protein company Vivera, and Spanish cultivated meat company BioTech Foods.
Already the majority owner of Pilgrim’s Pride, JBS made an offer to buy out the remaining shares of the second largest poultry company in the U.S. That transaction is still being reviewed both internally and externally.
Additionally, Pilgrim’s Pride completed the acquisition of the meat and meals business of Kerry Consumer Foods, with operations in the U.K. and Ireland.
Cherkizovo’s growth in turkey industry
Several years back, Russian meat company Cherkizovo Group entered into a joint venture with Spain’s Grupo Fuertes, to form Tambov Turkey, which has rapidly become one of Russia’s top turkey companies. In early December, Cherkizovo offered to purchase Grupo Fuertes’ half of the company, and has since acquired another Russian turkey company, Krasnobor.
Marfrig Global Foods’ investment in BRF
materialize in 2019, Marfrig Global Foods has since invested in BRF. It initially made a 24.23% investment in BRF in May, and furthered its investment in June to 31.66%.
Since Marfrig Global Foods sold Keystone Foods to Tyson Foods in 2018, it has primarily operated in the beef industry, and the investment in BRF would help it regain a presence in the poultry industry.
BRF itself went through some M&A activity in 2021, as it invested in cultivated meat company Aleph Farms and entered negotiations to further its ownership in Turkish poultry company Banvit.
Cal-Maine Foods becomes whole owner of Red River Valley Egg Farm
An interesting development occurred in 2015, when the two largest egg producers in the United States – Cal-Maine Foods and Rose Acre Farms, entered into a joint venture to start Red River Valley Egg Farm in Bogata, Texas.
That partnership came to an end in 2021, as Cal-Maine Foods bought out Rose Acres’ stake in the venture.
Cal-Maine also invested in egg products company MeadowCreek Foods in 2021.
Yum China invests in Fujian Sunner Development
As the KFC and Pizza Hut brands grow in popularity in China, parent company Yum China invested into the poultry supply chain in China, purchasing a 5% stake in China’s third largest and Asia’s fifth largest poultry producer, Fujian Sunner Development.
Foundation Food Group
Foundation Food Group formed with little fanfare with the merger of Prime-Pak Foods and Victory Processing, both in Gainesville, Georgia. However, Foundation Food Group became a well-known name in the poultry industry for the worst of reasons, when a liquid nitrogen leak occurred at the former Prime-Pak Foods plant, killing six people and hospitalizing many others.
Gold Creek Foods, also of Gainesville, announced its plans to acquire Foundation Food Group in September.