NEW YORK (AP) — Chicken producer Pilgrim's Pride Corp. confirmed Tuesday that Brazilian beef producer JBS SA will buy a majority stake in the company in a deal that values the company at $2.8 billion.
Pilgrim's Pride has agreed to sell 64 percent of stock in the reorganized company to JBS for $800 million in cash. Existing shareholders will receive shares totaling 36 percent of the company.
In addition, the plan calls for an exit financing of $1.75 billion.
Pittsburg, Texas-based Pilgrim's Pride was the nation's largest chicken producer before it filed for bankruptcy protection late last year, hobbled by debt and high feed costs.
The sale, of which rumors surfaced earlier this month, gives JBS an entry in the U.S. poultry market, buying up a major player in the category. JBS is already one of the top producers of beef and pork in the U.S.
It's not clear if the deal will be subject to antitrust clearance. Regulators earlier this year sued to block JBS' acquisition of a major beef producer, citing concerns for consumers and producers. The $560 million deal with National Beef Packing Co. was dropped.
Under terms of the plan, all creditors holding allowed claims will be paid in full by cash or issuance of a new note. Pilgrim's Pride said if the deal is approved by the Bankruptcy Court for the Northern District of Texas, it could emerge from bankruptcy protection by December.