Beef. That's the answer you'll get from José Batista Jr., a board member at JBS SA. From small beginnings in Brazil,
this beef producer has acquired its way to global standing. Having previously noted the
wave of cross-border dealmaking in the meat industry, we were glad to learn more about JBS in an article in Friday's Wall Street Journal.
In 2005, the WSJ reports, JBS made its first foreign acquisition, buying Argentine meatpacker Swift-Armour SA. The article explains how JBS established itself in South America, moved into Europe, entered the halal meat market after a visit to Egypt and then set its sights on the U.S., the world's biggest beefeater.
WSJ notes the American market has long been fragmented -- unlike chicken and pork producers, beef processors rarely own the animals before they go to slaughter, giving them excess slaughtering capacity and making their plants inefficient. A few months ago, JBS bought the fourth- and fifth-largest beef producers in the U.S. The latter is Smithfield Beef Group Inc. The Justice Department has yet to approve these deals.
Soaring feed costs are hurting chicken producers like
Tyson Foods Inc., and although the business models are somewhat different, beef producers are affected too. That's making it easier for a strong company like JBS to make deals. Next comes the job of making them pay off. -
Baz HiralalBrazilian Beef Clan Goes Global as Troubles Hit MarketThe cattle-call of meat-sector deals continues
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