JBS goes ‘head to head’ with Tyson on acquisitions

Record profits and debt reduction are positioning JBS SA, the world’s largest meat supplier, to absorb more competitors in the protein sector.

Strong demand and prices for beef in the United States contributed to the São Paulo-based company’s higher earnings, allowing it to reduce debt and consolidate an investment grade rating.

This is helping to close a gap in the cost of credit with its main rival, Tyson Foods Inc., the CEO said, Gilberto Tomasoni.

“We’re starting to go toe to toe with Tyson“Said the executive in an interview Wednesday. “Lower debt costs make us more competitive in mergers and acquisitions, leading to more deals”.

After rising to the top of the world meatpacking rankings thanks to a wave of debt-driven buying, JBS has been working to improve leverage metrics in recent years. Moody’s has just upgraded the business, moving away from its speculative grade status and supporting refinancing plans that include bond buybacks.

“There is a potential $ 220 million in savings on debt refinancing”Said the CFO, Guilherme Cavalcanti, in the same interview.

The company’s net debt-to-ebitda ratio hit a record low in the third quarter, while revenue and net profit hit record highs and beat analyst estimates. The good results in the US offset higher livestock prices and high grain costs at the group’s Brazilian chicken unit.

In a series of management changes announced Wednesday, JBS reintroduces a global operations presidency that will be shared between André Nogueira, who will lead North America operations, and Wesley Batista Filho, who will manage Latin America, Oceania and plant operations. .

So far this year, JBS has paid out $ 3.3 billion to shareholders and spent $ 3.7 billion on acquisitions, with a cash position of $ 4.3 billion at the end of September. New businesses with high margins, such as plant-based and aquaculture companies, are on the deal radar.

“We want to turn both into a great business,” Tomazoni said.