Brazilian company JBS SA, the world's largest beef producer, said it aims to also become the largest distributor of the meat by the end of next year and has been approached by companies seeking to be acquired.
"We are confident that we will be, at the end of next year, not only the major producer but the major distribution platform," of frozen products, Chief Executive Officer Joesley Mendonça Batista said in a seminar in New York.
Batista turned JBS into the world's top beef producer in 2007 after paying US$ 225 million for Greeley, Colorado-based Swift & Co. São Paulo-based JBS last year bought Smithfield Foods Inc.'s beef-processing and cattle-feeding operations for US$ 565 million. An agreement to buy National Beef ended after opposition from U.S. antitrust enforcers.
JBS last year stopped making acquisitions and focused on reducing debt, Batista said. Now, the company is ready to buy distribution assets and is analyzing offers from companies willing to be bought, he said.
"I see all of our competitors talking about de-leveraging at the same time that JBS is starting to think about new opportunities," Batista said during a webcast presentation at the BMO Capital Markets conference.
"Markets are getting better, the beef and protein markets, credit is coming back … I'm not suggesting we'll acquire someone tomorrow, but we're talking about how to take advantage of what we did, how to grow in this new scenario."
"Everybody has been calling, because when they look at our balance sheet, we are de-leveraged and we have cash," Batista said. "We talk to many people everyday."
JBS is not in formal negotiations with any companies "yet," Batista added. "Until today, we are just listening."
The meat producer is ready to take on debt again to finance its planned expansion. Batista said JBS sold US$ 700 million of five-year bonds in international markets in April. The yield of 13%, or 11.14 percentage points above U.S. Treasuries, was more than double the premium of its last offering in 2006.
"I'm thinking about leveraging again," Batista said. "For sure, if the financial market becomes better," he added, without specifying what kind of debt he would look for.
Batista declined to comment on JBS's performance. The company is scheduled to release its first-quarter results later this week, after market closes.
Analysts expect consolidation to increase in the sector. Several beef companies have filed for bankruptcy protection in recent months.