PITTSBURG, Texas (AP) — Pilgrim's Pride Corp. said Thursday that the Federal Trade Commission and Department of Justice have cleared the way for its deal with Brazilian beef producer JBS SA, which would help pull the chicken producer out of bankruptcy.
Last month, JBS said it would buy a majority stake in Pilgrim's Pride for $800 million, in a transaction that would include paying off Pilgrim's Pride's creditors in full and distributing new stock to current shareholders — something unusual for a company in bankruptcy protection.
Pilgrim's Pride and six of it subsidiaries filed a reorganization plan in September with the U.S. Bankruptcy Court for the Northern District of Texas.
The Pittsburg, Texas-based company will sell 64 percent of the stock in the reorganized company to JBS, implying a total company value of $1.25 billion. Existing shareholders will receive shares in the remaining 36 percent of Pilgrim's Pride worth $450 million.
Including the plan to pay off $1.5 billion of current debt, the entire transaction is worth $2.8 billion, JBS said last month.
Pilgrim's Pride was the nation's largest chicken producer with about 23 percent of the U.S. market before it filed for bankruptcy protection late last year. The company was crippled by debt from its buyout of a competitor and by high feed costs that left much of the industry in a slump.
The company anticipates its reorganization plan will be approved by the bankruptcy court in time for it to exit bankruptcy protection before the end of December.