JBS S.A. announced last week that it anticipates completing its acquisition of the Canadian operations of XL Foods on Jan. 14.
JBS said the acquisition will be conducted through JBS Food Canada Inc., a business of its U.S. division, JBS USA.
The acquisition includes the XL beef packing plant in Brooks, Alb., which can handle 4,000 head of cattle per day, and the beef packing plant in Calgary, Alb., which can run 1,000 head per day.
The acquisition also includes a cattle feedlot and 6,600 acres of adjacent farmland that are associated with the Brooks facility.
JBS reached the acquisition agreement with XL's owner, Canadian rancher Nilsson Bros., last year when JBS USA assumed management of the Brooks plant (Feedstuffs, Oct. 22, 2012) after the Canadian Food Inspection Agency closed the plant because of product that was contaminated with Escherichia coli O157:H7 (Feedstuffs, Sept. 28 and Oct. 8, 2012).
The plant conducted the largest meat recall in Canadian history, although no one died in the outbreak that spread across Canada and into the U.S.
The agreement calls for JBS to pay $100 million -- $50 million in cash and $50 million in JBS stock -- for the Brooks and Calgary properties.
The Alberta government waived its limitations on foreign ownership of land in December to allow the acquisition to proceed (Feedstuffs, Jan. 7). Officials acknowledged that the XL operations have too much economic importance to the province not to waive the restrictions.
The agreement also provides an exclusive option for JBS to acquire an XL beef packing plant in Nampa, Ida., with a daily run of 1,000 head and a cow plant in Omaha, Neb., with a daily run of 1,200 head.
JBS said it won't exercise that option at this time, pending regulatory review, and the U.S. facilities will continue to be operated by XL. The Nampa plant currently is closed.
A number of U.S. livestock and other groups have written a letter to the U.S. Department of Justice opposing JBS's acquisition of the Nampa and Omaha plants, citing consolidation and market erosion issues. However, Nampa-area cattle producers have said they would welcome new ownership that might reopen that plant, and JBS USA does not currently have any presence in cow slaughter.
JBS emphasized that the agreement does not provide for it to assume any of XL's debts or liabilities.
JBS, headquartered in Sao Paulo, Brazil, is the largest beef processor in Brazil.
JBS USA, based in Greeley, Colo., is the largest cattle feeder in the U.S., the third-largest beef and pork processor in the U.S. and, through its majority ownership in Pilgrim's Pride Corp., the second-largest chicken integrator in the U.S.
JBS is the largest beef exporter in the world.