CHICAGO Nov 29 Pilgrim's Pride Corp,
the world's second-largest chicken producer, said on Tuesday it
will buy smaller rival GNP Company in a $350 million deal that
will increase its organic and antibiotic-free offerings.
The all-cash deal allows Pilgrim's, which is mostly owned by
meatpacking company JBS SA, to tap more deeply into a
consumer shift toward products perceived to be more natural and
Increasingly, major meat companies and restaurants are
seeking to raise poultry on organic grain and without
antibiotics to take advantage of the trend. The change also
addresses consumer concerns about health risks from eating meat
raised with certain antibiotics.
Pilgrim's shares were up 2.1 percent at $18.35 in afternoon
trading, broadly in line with other meat producers such as Tyson
GNP, owned by privately held Maschhoff Family Foods, sells
organic chicken and chicken raised without any antibiotics under
its Just Bare brand. Each package contains a code that can be
used to trace the chicken inside to where it was raised.
Acquiring the brand "further positions Pilgrim's as a
leading provider of high-quality products in the fastest growing
chicken segments," Pilgrim's said in a statement.
GNP also sells chicken under the Gold'n Plump brand.
Public health experts and federal regulators have long been
concerned that routine feeding of antibiotics to animals could
lead to antibiotic-resistant superbugs, a health hazard for
humans. Finding enough protein raised in the United States
without such drugs has been a challenge for food companies.
In August, McDonald's Corp said it had removed
antibiotics that are important to human medicine from chicken
served in its U.S. stores.
Tyson, the nation's largest chicken company, intends to
remove such antibiotics from its flocks by September 2017.
Pilgrim's said it expects to close the deal for GNP in the
first quarter of 2017. A Pilgrim's representative could not
immediately be reached for comment.
The company's statement said the acquisition will allow
Pilgrim's to expand production and customer bases in the upper
GNP has processing plants in Minnesota and Wisconsin.
A GNP spokeswoman declined to discuss the company's sales or
comment on the transaction.
Maschhoff acquired the chicken company three years ago for
an undisclosed amount, in a departure from its business as the
biggest family-owned U.S. pork company. Jason Logsdon, the
Maschhoff chief executive who oversaw the transaction, left the
company last year.
(Editing by Matthew Lewis)