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JBS Takes over XL Foods' Canadian Operations

18 October 2012

CANADA - Brazilian meat and bef processing giant JBS SA has taken over the management of some Canadian operations of the troubled XL Foods through its US subsidiary JBS USA.

The agreement allows an exclusive purchase option of these operations and of the US operations of XL Foods. The US operations, however, will continue to be operated by XL Foods during the option period.

XL Foods Canadian processing plant in Brooks, Alberta is at present at the centre of an E.coli recall and food scare and its operations are being scrutinised by the Canadian Food Inspection Agency.

In Canada, JBS USA will provide management services to the XL Lakeside beef processing plant located in the province of Alberta with a total capacity to process 4,000 head of cattle per day.

As part of this agreement, JBS USA negotiated the exclusive option to purchase the following assets:

  • 1 beef packing plant in Brooks (Alberta/Canada) with capacity to process 4,000 head of cattle per day.
  • 1 beef packing plant in Calgary (Alberta/Canada) with capacity to process 1,000 head of cattle per day.
  • 1 feedlot in Brooks (Alberta/Canada) with a one-time capacity to feed 70,000 head of cattle.
  • 6,600 acres of farmland adjacent to the feedlot in Brooks (Alberta/Canada).
  • 1 beef packing plant in Omaha (Nebraska/USA) with capacity to process 1,200 head of cattle per day.
  • 1 beef packing plant in Nampa (Idaho/USA) with capacity to process 1,000 head of cattle per day.

When it exercises the option to buy these US and Canadian assets, JBS has agreed to pay a total of US$100 million, half in Company shares and half in cash. JBS will not assume any of XL Foods debt or liabilities.

JBS said it will keep the market informed regarding the ongoing actions related to this agreement.

TheCattleSite News Desk



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