JBS to acquire XL Foods’ operations in Canada

JBS USA, a wholly owned subsidiary of Brazilian meat processor JBS, plans to acquire certain Canadian operations of meat packing company XL Foods as well as its Lakeside beef packing plant in Brooks, Alberta, Canada, through its new Canadian subsidiary, JBS Food Canada.

Under the terms of the deal, JBS Food Canada will acquire the Lakeside beef packing plant as well as a beef packing plant in Calgary and a feedlot in Brooks, and the adjacent farmland acreage supporting the feedlot operation.

The transaction, which does not include the assumption of any of XL Foods’ debt or liabilities, is expected to be completed on 14 January.

JBS USA Beef president and COO Bill Rupp said that the Canadian operations will be an important asset to the company’s strategic global beef production model.

"We look forward to partnering with Canadian producers to deliver quality Canadian beef to customers around the world," Rupp added.

XL Foods’ Brooks plant is considered to be one of largest beef processing facilities in Canada with a capacity to process 4,000 head of cattle each day; it employs nearly 2,200 workers.

The facility was closed in September 2012 due to a recall of its products for E. coli contamination, and resumed operations in October, when JBS USA took over its management.

The management agreement also provided JBS USA with an exclusive option to purchase the US operations of XL Foods.

JBS will pay XL Foods $50m in cash and $50m in JBS shares for the Brooks plant and other XL properties in Canada and the US.

JBS noted that it is awaiting a regulatory review from authorities before exercising its option to acquire XL Foods’ US operations.

JBS USA is a processor of beef, pork and lamb in the US and a processor of beef and lamb in Australia.

It processes, prepares, packages and delivers beef and pork products for sale to customers in over 60 countries on five continents.