USA – JBS, the world’s largest meatpacker, has withdrawn a proposal to acquire the remaining shares of its U.S.-based subsidiary Pilgrim’s Pride.
The company said in a security filing it was unable to come to an agreement with Pilgrim’s Pride regarding the terms of the proposed transaction.
In August, JBS, the world’s largest meatpacker, announced its plan to acquire the remaining shares of Pilgrim’s Pride, aiming to delist the company.
JBS agreed to buy a majority stake in Pilgrim’s Pride in 2009 and currently owns 80.21% of the Colorado-headquartered chicken producer.
US$52m price-fixing settlement
Meanwhile, JBS USA has said that it has approved a US$52.5 million settlement in a lawsuit in which the company was accused of conspiring to fix beef prices.
The so-called “ice breaker” agreement was filed in the US District Court of Minnesota and will need to be approved by Chief Judge John R. Tunheim.
“While JBS does not admit liability for the claims alleged as part of this case, it believes this decision is in the best interest of the company,” said a JBS spokesperson.
The original complaint alleges that the processors conspired to inflate domestic beef prices paid by direct purchasers since 2015.
The complaint said those actions reduced slaughter volumes and created a deficit that smaller companies could not make up.
In November 2021, JBS USA also agreed to a US$12.75 million settlement in a pork price-fixing case between the company and Commercial and Institutional Indirect Purchaser Plaintiffs (CIIPS).
Beef market on the spotlight
Congress and the US Department of Justice have been investigating US beef markets over the last two years.
Four large meat packing companies, Tyson Foods, control 85% of the beef market, something which the administration believes is leading to farmer exploitation and higher meat prices.
According to the Biden administration, excessive market concentration in the US meat industry has been highlighted as contributing to the country’s food supply chain vulnerabilities.
In a bid to avoid the “dramatic consolidation of the industry,” the US administration has launched an action plan targeting a fairer, more competitive and more resilient meat and poultry supply chain.
This includes US$1 billion worth of funds targeting expansion of independent processing capacity and a catalog of other rescue package plans.
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