Tyson Foods to sell Mexican, Brazilian poultry operations for $575m

US-based meat producer Tyson Foods has signed an agreement to sell its poultry businesses in Mexico and Brazil to JBS, for $575m.

JBS will acquire Tyson’s Mexican business through its wholly-owned subsidiary Pilgrim’s Pride.

JBS Foods, another JBS subsidiary, will acquire the Brazilian business, said Tyson.

The Mexican business known as Tyson de México is based in Gomez Palacio in North Central México.

With three facilities, the business employs around 5,400 people in its plants, offices and seven distribution centres.

Known as Tyson do Brasil, the Brazilian operations include three production facilities – two in Santa Catarina and one in the state of Parana. It employs around 5,000 people.

Tyson Foods president and CEO Donnie Smith said: "Although these are good businesses with great team members, we haven’t had the necessary scale to gain leading share positions in these markets.

"In the short term, we’ll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands. Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence."

The transaction, which is expected to be completed by the end of 2014, is subject to regulatory approval.

Tyson will continue to provide Mexican customers with US-produced chicken and chicken produced in Mexico through a co-packaging arrangement with Pilgrim’s Pride.

The company intends to focus more on its poultry operations in Asia. It has three poultry facilities in China and owns a majority stake in two poultry plants in India.

These Asian operations employ a combined total of around 5,000 people.

Tyson Foods, which was established in 1935, is one of the world’s largest processors and marketers of chicken, beef and pork.