Rumors Fly About Possible JBS Bid for Pilgrim's Pride

Last Updated Sep 3, 2009 1:04 PM EDT

Brazilian meat giant JBS may or may not be planning to buy bankrupt chicken processor Pilgrim's Pride.

Brazilian newspapers said a bid was imminent but failed to cite any sources. The Wall Street Journal confirmed the rumors, based on information from anonymous "people familiar with the matter."

Initially, according to the Wall Street Journal, "representatives for JBS and Pilgrim's declined to comment." But JBS later issued a statement, saying, "There is no transaction or firm commitment by the company, at this time, which would justify the disclosure of a material fact regarding the possible acquisition of other companies by the company."

In other words, "We're not obligated to tell you anything yet, and we're not going to." Which is not the same thing as a no.

Pilgrim's Pride filed for bankruptcy in December. Initially this looked like good news for rival Tyson Foods, but if JBS takes over, it could prove a daunting rival; JBS is the largest exporter of beef in the world.

JBS primarily deals with beef and pork; Pilgrim's would be the company's first foray into chicken. But if JBS does bid on the company, it will have to deal with U.S. antitrust authorities. Earlier this year, JBS abandoned plans to buy National Beef Packing because of antitrust scrutiny, though its purchase of Smithfield Beef went through.

But investors seem to think everything will work out -- Pilgrim's Pride shares rose 10 percent after the rumors came out.

  • Katherine Glover