Nova Holding

JBS announced also the acquisition of the majority package (64%) of the Pilgrim s Pride(OTC:PGPDQ) Gorge, one of the major processors of chicken from the United States, valued at US $2,800 million. Pilgrimss Pride has among its main clients to supermarkets such as Wal-Mart (NYSE:WMT), Costco (NASDAQ:COST), Soriana and Chedraui; as well as Operadora VIPS, SIGMA food centre, Cafeterias Toks and Restaurantes California. The purchase by the American company JBS has generated fear among the Mexican producers. Jaime Crivieli, President of the National Union of poultry farmers of Mexico could not hide the concern of the advancement of JBS in the international poultry market. Crivieli said the following about the inability of Mexico to compete with Brazil in poultry: above all because there is no support for the funding that will allow boost to the sector, which has led to the closure of medium-sized companies that were integrated to large companies as Bachoco. JBS advance threatens the future of the sector in Mexico, country where probably also the Brazilian set his goal. The agreed merger with Bertin according to a communique which companies sent the bag of values of San Pablo emerge Nova Holding, and they will become the controlling shareholder of JBS (main shareholder with 60 percent of the new holding company) and Bertin (who stays with the rest).

The new company will have 81 vaccine refrigeration plants in the world, with good geographic dispersion: the 25 JBS has in Brazil, 16 in United States, 10 in Australia, 8 in Italy and 6 in the Argentina, will add the 14 Bertin in his country (which totaled 39), plus one in Uruguay and the other in Paraguay. And bovine slaughter capacity will increase from 73,900 heads daily to nearly 88,000. That is, neither more nor less than one-third of the total slaughter of the Argentina. This giant size It emerges is impressive. According to the site of the Brazilian newspaper economic value, whereas only the operations of agri-food, with new companies (Bertin and Pilgrim s Pride) the turnover of JBS in 2008 would have been $28.725 million dollars. This would transform into the third largest company in Brazil behind Petrobras (BVSP:PETR3; NYSE:PBR) and Vale (NYSE:vale).

Another way to verify the size of the new company is to compare it with the data of foreign exchange earnings generated by exports of the Argentine soybean complex (beans, flour, pellets and soybean oil) in 2008, which was $12,333 million, less than half of the turnover of the new JBS. Bertin is one of the main Brazilian meat companies with a capacity to slaughter on the order of 14,000 daily heads, but it also has companies engaged in the production of biofuels, genetic improvement, clothing, infrastructure, electricity and hospitality. Thus, with the merger, JBS achieved also a diversification of its activities which help to diversify risks and take advantage of economies of scope, this being beneficial to the value of the company. Actions both JBS and Marfrig, although they have noted an upward trend in the last time, are far from their highs. But the best thing is that the expansion strategy of both companies will surely make them to overcome more than maximum contributions. These companies no doubt have very good prospects for those who have patience and are committed to the medium term.