National Beef Packing Co intends to operate as independent company now that Brazilian beef company JBS SA has abandoned its attempt to buy the No. 4 U. S. beef producer, National Beef’s chairman told Reuters Feb. 20.
While disappointed the deal was cancelled, National Beef Chairman Steve Hunt said the company would move forward as a stand-alone business.
“Now that we know for sure that this transaction will not close, then we continue to move forward on a stand-alone basis,” he said. “We will always be looking for opportunities to generate greater returns. That may be through diversification, it may be through other branded products.”
National had no current plans to merge or partner with another company, Hunt said.
In March 2008, JBS announced plans to buy National Beef in a deal worth $970 million in cash, stock, and debt. At that time, JBS also said it planned to buy the beef processing and cattle feeding operations of Smithfield Foods Inc.
The U. S. Department of Justice allowed the Smithfield deal to go through, but sued to block the National purchase, claiming it would give JBS too much power in buying cattle and in selling beef.
Discussions between JBS and the Justice Department followed, with the focus apparently on getting JBS to divest some beef plants, although which plants was never disclosed.
National Beef is a subsidiary of U. S. Premium Beef LLC, a cattle marketing company based in Kansas City, Mo. Hunt is also chief executive of U. S. Premium Beef.
At the National Cattlemen’s Beef Association convention in January in Phoenix, Wesley Batista, chief executive of JBS-USA, said discussions with the Justice Department involved “divesting assets,” but he did not disclose which assets.
Some cattle industry groups had opposed JBS’s effort to buy National, claiming it would reduce the buying competition for cattle.
One group, R-CALF, said it was pleased that JBS had pulled out of the deal.
National Beef has cattle slaughter plants in Liberal and Dodge City, Kansas, and Brawley, California, and beef processing facilities in Hummels Wharf, Pennsylvania; Moultrie, Georgia; and Kansas City, Kansas.
National had sought the JBS deal as a means of expanding and diversifying its business, Hunt said.
“Effectively, JBS was just not able to reach an agreement with them, and the parties agreed to terminate the transaction,” Hunt said of the Justice Department negotiations.