High consolidation to come in hog sector

by Affaires économiques

The world number one of meat processing, Brazilian JBS, is on the way to grab all Cargill’s hog activities in the United States.

With this purchase worth 1.45 billion USD, JBS will increase his US capacity to 20 million heads per year. It’s equal to three-times Quebec’s production. JBS, whose first U.S. acquisitions goes back to 2007, will process almost fifth of all hogs.

This transaction is conditional to the approval by U.S. Department of Justice. But analysts agree there is few chances that the transaction will be refused, given the fact that the U.S. Department of Justice already authorized the purchase of Smithfield (largest producer-processor) by the Chinese enterprise Shangui. If the transaction goes on, Shangui and JBS will almost produce half of the U.S. pork meat.   

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