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Tyson Foods Inc. has agreed to sell its poultry businesses in Mexico and Brazil to food processing company JBS SA, in a transaction valued at $575 million.
JBS SA subsidiary and rival meat processor Pilgrim's Pride will purchase Tyson's Mexican business --Tyson de México, based in Gomez Palacio –- which includes three plants and seven distribution centers, employing more than 5,400 people. Tyson will continue to sell U.S.- and Mexico-produced products in Mexico through a co-packaging deal with Pilgrim’s Pride.
JBS Foods, also a wholly owned subsidiary of JBS SA, will buy the poultry business in Brazil, known as Tyson do Brasil, which operates three production plants and employees 5,000 people.
“Although these are good businesses with great team members, we haven’t had the necessary scale to gain leading share positions in these markets,” said Donnie Smith, president/CEO of Springdale, Ark.-based Tyson Foods. Smith added that proceeds from the sale will be used to pay down debt from the company's recent acquisition of Hillshire Brands for $7.8 billion.
Tyson said the divesture of these assets will be complete by the end of this year.