Tyson Foods has signed a deal to sell its poultry operations in Mexico and Brazil to JBS for $575m, as part of efforts to pay down debt associated with its $7.7bn purchase of Hillshire Brands.
Tyson's Mexican operations will be acquired by Pilgrim's Pride, which is majority owned by JBS USA Holdings, while JBS Foods, also a wholly owned subsidiary of JBS, will take over the Brazilian business.
Known as Tyson de México, the Mexican poultry business is based in Gomez Palacio, and operates three plants and seven distribution centers with a workforce of more than 5,400.
The Brazilian operations, known as Tyson do Brasil, include three production plants, two in Santa Catarina and one in the Parana state. It employs 5,000 people.
JBS and Pilgrim's Pride plan to continue all the operations as usual with the existing workforce, and maintain all labor contracts in both countries.
Tyson Foods president and CEO Donnie Smith said: "Although these are good businesses with great team members, we haven't had the necessary scale to gain leading share positions in these markets.
"In the short term, we'll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands. Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence."
Subject to regulatory approval, the transaction is expected to close by the end of this year.
Tyson Foods will continue to supply the Mexican market with US-produced chicken and chicken produced in the domestic market through a co-packaging arrangement with Pilgrim's Pride.
The company plans to focus on its Asian poultry operations comprising three poultry facilities in China and majority-owned two plants in India. It employs approximately 5,000 people in Asia.
Image: Tyson Foods will continue to supply the US-produced chicken in Mexico. Photo: courtesy of Tyson Foods, Inc.
