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Having broken talks with the Justice Department on the merger of their companies, JBS-Swift & Co. and U.S. Premium Beef, LLC (USPB)/National Beef Packing Co., LLC (National Beef) will move forward as independent entities.
The Brazilian beef giant late last week terminated the acquisition process of National Beef Packing Co., LLC, which was originally announced last March. The Department of Justice moved to file a suit to block the deal on Oct. 20, 2008, on competition grounds.
In a statement, JBS said it "endeavored to encounter a solution with the parts involved, but in the absence of satisfactory conditions decided not to follow on with the acquisition."
Steve Hunt, USPB's CEO, said, "Although this is not the outcome we anticipated, we are excited to continue the growth and success of our business on a stand-alone basis. As demonstrated by our fiscal year 2008 and first-quarter 2009 financial results, National Beef’s value-added business model, rooted in strong relationships with cattle producers and beef customers, continues to generate industry-leading profits."
John Miller, CEO of National Beef, added that the development "has re-energized our management team. With our strong liquidity position and numerous opportunities to grow our business -- both internally and externally -- we are eagerly looking forward to building on our value-added model while continuing to focus on serving the needs of our customers."
U.S. Premium Beef, LLC is the majority owner of National Beef Packing Co., LLC, a leading U.S. beef processor. More than 2,100 producers from 36 states have marketed cattle on USPB's quality-based grids, which are the foundation of National Beef’s value-added product lines that have enabled it to be a leader in branded product programs for both domestic and international markets.
Kansas City, Mo.-based National Beef has operations in Liberal and Dodge City, Kan.; Brawley, Cal.; Hummels Wharf, Pa.; Moultrie, Ga. and Kansas City, Kan. National Beef processes and markets fresh beef, case-ready beef and beef byproducts for domestic and international markets.
JBS became the No. 3 U.S. beef producer in October 2008, when the Justice Department approved its purchase of the beef operations of Smithfield Foods, which included four beef plants and the Five Rivers Ranch cattle-feeding operation, but held back on approving the National Beef deal. The company had been negotiating with the agency to try to work out a compromise since.
JBS said it will continue to pursue further efficiencies at all of its other units within the United States, which consist of eight cattle slaughter plants with a daily capacity of 28,100 head, three pork slaughter plants with a daily capacity of 47,900 head, 11 cattle feed yards in six states, a case-ready plant and a lamb slaughter plant as well as related operations in Australia, Italy, Argentina and Brazil, where its headquarters are located.