Shearman & Sterling Advises JBS in Acquisition of Pilgrim’s Pride

28 Sep 2009 – – Legal Newswire Service –

Shearman & Sterling represented JBS USA Holdings, Inc. (“JBS USA”), a wholly owned subsidiary of the Brazilian meatpacking company JBS S.A., in its acquisition of a controlling stake in Pilgrim’s Pride Corporation (“PPC”). The enterprise value of the deal is approximately $2.8 billion. Pursuant to the stock purchase agreement entered into on September 16, JBS USA will purchase 64% of the shares of common stock of PPC in exchange for a cash payment of $800 million. The remaining 36% of the shares of common stock, valued at $450 million, will be issued to the existing equity holders of PPC.

The acquisition will be consummated through a joint plan of reorganization filed September 17, 2009 by PPC and its subsidiaries in the United States Bankruptcy Court for the Northern District of Texas (the “Plan”). Under the terms of the Plan, all holders of allowed claims will be paid in full using the $800 million cash payment from JBS USA. The Plan also calls for an exit credit facility of up to $1.65 billion.

Pursuant to the Plan, JBS USA will have the option, following the completion of its initial public offering, to convert the remaining 36% shares of common stock in PPC into common stock of JBS USA. The transaction and the Plan are subject to the approval of the Bankruptcy Court and to regulatory approvals. The parties expect that the transaction will close and PPC will emerge from its Chapter 11 reorganization in December 2009.

The Shearman & Sterling team included partners Douglas P. Bartner (New York-Bankruptcy & Reorganization), Michael J. McGuinness (New York-M&A), Don J. Lonczak (Washington, D.C.-Tax), Andrew Béla Jánszky (São Paulo-Capital Markets), Samuel A. Waxman (New York-Intellectual Property), Kenneth S. Prince (New York-Antitrust) and Lisa M. Brill (New York-Property); counsel Jeffrey L. Salinger (New York-Property/Environmental); and associates Erin E. Chayko (New York-Bankruptcy & Reorganization), James G. Loftus (New York-M&A), Claudio Oksenberg (São Paulo-Capital Markets), Amelia K. Kalil (New York-M&A), W. Fraser Hartley (New York-Bankruptcy & Reorganization), Owen W. McCarthy (New York-Finance), Robert A. Britton (New York-Bankruptcy & Reorganization), Assaad Y. Nasr (New York-M&A) and Seth J. Kerschner (New York-Environmental).

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