September 3, 2009 at 3:44 PM CDT - Updated June 16 at 11:23 PM
PITTSBURG, Texas (AP) - Beleaguered chicken producer Pride $2 billion, according to a news media report Wednesday.
Pilgrim's Pride spokesman Ray Atkinson told the Associated Press in an e-mail the company doesn't comment on rumor or speculation.
But the Wall Street Journal reported that a deal to sell the Pittsburg, Texas-based company could be announced next week, saying negotiations were in their final stages Wednesday, but it said the deal "could still fall apart at the last moment."
Messages left at JBS's U.S. headquarters in Greeley, Colo., were not immediately returned.
Pilgrim's Pride was the nation's largest chicken producer before
it filed for bankruptcy protection late last year. It was saddled by massive debt, high feed costs and slumping demand.
The company has since then undergone restructuring to shed jobs and costs and previously said it expects to emerge from bankruptcy protection by the end of the year.
The meat industry has been hurting as producers recover from last summer's record high ingredient costs. Oversupply of meat on the market meant prices to keep up with those rising costs.
Pilgrim's Pride was also hobbled by debt tied mainly to its
acquisition of rival Gold Kist Inc. in 2007 for more than $1 billion. The purchase made producer in the U.S., with about 23 percent of the market when it filed for Chapter 11 bankruptcy protection in December.
Since then the company has been downsizing to stay afloat.
The sale to JBS would broaden JBS's footprint in the U.S. and mean an expansion into poultry, now that it has gobbled some of its beef competitors. Regulators have challenged some of JBS's moves in the United States on antitrust grounds.
It's not clear if the deal for similar scrutiny because JBS would be entering a new market.
In February, the company dropped its $560 million stock-and-cash bid to buy out National Beef Packing Co., the fourth-largest U.S. beef processor. Regulators filed suit to block the deal, saying that because JBS is the third-largest U.S. beef packer the deal could create a monopoly and push up costs for consumers and drive down prices paid to ranchers and feedlots.
In October, JBS bought Smithfield Foods Inc.'s beef business for about $565 million in cash. Smithfield's beef unit had been the nation's fifth-largest beef producer, and regulators said they would not challenge that.
JBS became the third-largest beef processor in the U.S. in 2007 after purchasing Greeley, Colo.-based Swift & Co. for $225 million.
According to the company's Web site, it is also the third-largest U.S. pork producer.
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