A $42.5 million settlement has been reached, bringing an end to a lawsuit filed by shareholders that questioned the fairness of Pilgrim’s Pride’s 2017 acquisition of Moy Park from JBS.
The lawsuit was filed in the Court of Chancery of the State of Delaware. The plaintiffs claimed that because JBS controlled both Pilgrim’s Pride and Moy Park, it must prove that the deal was entirely fair. JBS, according to the WATTAgNet Top Companies Database, owns a 78.5% stake in Pilgrim’s Pride.
The acquisition was valued at $1.3 billion.
The lawsuit was initially filed by shareholder Matthew Sciabacucchi, a Law 360 report stated, and in the suit, it was claimed that the transaction had been vetted by a special committee that wasn’t independent and did not seek input from the company’s minority shareholders. A subsequent suit filed by the Employees’ Retirement System of the City of St. Louis was consolidated with Sciabacucchi’s suit.
The plaintiffs in the case alleged 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.
An attempt to have the lawsuit dismissed was denied in March.
Brazil-based JBS is the world’s largest poultry 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.
