Uncertainty looms as Brazilian company buys Swift

US - The acquisition of leading US meatpacker Swift by a Brazilian company is being watched carefully by livestock producers, the meat industry and members of Congress.
calendar icon 30 May 2007
clock icon 3 minute read
Swift employees in Worthington, Minn.Swift announced that it is being sold to a Brazilian company for $225 million.

JBS SA, the company that controls Brazil's leading beef exporter, Friboi, announced that it will buy Swift and Co., the world's third-largest fresh beef and pork products producer, for $225 million cash. It will also take on $1.2 billion of Swift debts.

JBS officials expect the deal to be completed by July.

The sale comes in the wake of tough times for Swift, which has been owned by a Dallas private equity firm, HM Capital Partners, since 2002.

A federal immigration raid last December saw the arrest of 1,300 workers at company premises, including around 200 employees from its Worthington, Minnesota factory.

The sale of the business comes as no surprise, although it marks another blow for the meat-processing sector in North America, which is seeing considerable rationlisation.

"A major independent meat company owned by a large international conglomerate is not unusual in our business. It's a continuation of an ongoing trend," said Jeremy Russell, director of communications and government relations for the National Meat Association.

But it's a trend that concerns South Dakota's Congressional delegation. Sens. Tim Johnson and John Thune and Rep. Stephanie Herseth Sandlin have all called for greater antitrust protection for livestock producers following Smithfield Foods, take over of its competitor, Premium Standard Farms, earlier this year.

"As a longtime supporter of country-of-origin labeling, and having expressed deep concern over the consolidation in agricultural businesses, I find this development especially troubling," said Thune. He said that American consumers deserved to know where their food was produced, and that US farmers deserved a fair price for their livestock. "This kind of deal accomplishes neither of those standards," he added.

Source: ArgusLeader.com
© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.