(Adds sales data, Maschhoff comment, closing stock price)
By Tom Polansek
CHICAGO Nov 29 Pilgrim's Pride Corp,
the world's second-largest chicken producer, will buy smaller
rival GNP Company in a $350 million deal that will increase its
organic and antibiotic-free product offerings, the companies
said on Tuesday.
The all-cash deal helps Pilgrim's, which is mostly owned by
meatpacker JBS SA, keep up with a consumer shift
toward products perceived to be more natural and healthy.
To take advantage of the trend, meat companies and
restaurants are increasingly seeking to sell poultry raised on
organic grain and without antibiotics. The change also addresses
consumer concerns about health risks from eating meat raised
with certain antibiotics.
Pilgrim's shares ended up 1.7 percent, broadly in line with
other meat producers such as Tyson Foods Inc.
The sale comes after GNP, owned by privately held Maschhoff
Family Foods, said in February that it planned to remove all
antibiotics from chickens sold under its Gold'n Plump brand by
2019. The company already sells organic chicken and chicken
raised without antibiotics under its Just Bare brand.
In a statement, Pilgrim's said the acquisition gives it "an
opportunity to immediately strengthen the company's position in
fast-growing and higher-margin branded retail product
categories, such as natural and organic."
A Pilgrim's representative could not be reached. The
company's statement said the deal will also help it to expand in
the upper U.S. Midwest.
Public health experts and federal regulators have long been
concerned that routine feeding of certain antibiotics to animals
could lead to antibiotic-resistant superbugs, a health hazard
for humans. Finding protein raised in the United States without
such drugs has been a challenge for food companies.
Tyson, the nation's largest chicken company, intends to
remove antibiotics important to human medicine from its flocks
by September 2017. It also has put a stronger focus on selling
GNP ranks 19 among U.S. producers of broiler chickens,
slaughtering 1.9 million birds a week for meat, according to
Watt PoultryUSA, which tracks companies in the sector. It said
GNP's 2015 sales were $443.4 million.
A GNP spokeswoman declined to comment on sales or the
Maschhoff acquired the company three years ago for an
undisclosed amount, in a departure from its business as the
biggest family-owned U.S. pork company.
A Maschhoff spokesman said the company's owners want to
focus on their hog business again.
Jason Logsdon, the Maschhoff chief executive who oversaw the
acquisition, left the company last year.
(Editing by Matthew Lewis and Dan Grebler)