Tara Lachapelle is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

Why did the chickens cross the road? To pay legal bills. 

No, really. Brazilian meatpacking giant JBS SA announced Monday that it's selling Moy Park, its U.K. poultry business, but the assets aren't traveling very far. The buyer is Pilgrim's Pride Corp., a U.S. chicken producer that's also controlled by JBS.

The reshuffling of assets comes as JBS's billionaire Batista  family scrambles to raise money after executives of its holding company J&F Investimentos SA -- including brothers Joesley and Wesley Batista -- signed a 10.3 billion reais ($3.16 billion) plea-bargain agreement over graft and other crimes. According to prosecutors it was the world's biggest leniency deal. 

Going Global
Moy Park will give Pilgrim's Pride a toehold in Europe as the company seeks to diversify
Source: Bloomberg, Pilgrim's Pride presentation
Note: Company also classifies 3% of pro-forma revenue as "export."

Even though the buyer and seller are tight-knit, it seems debt-laden JBS needed the transaction badly enough that Pilgrim's Pride got it relatively cheaply. Pilgrim's Pride is paying $1 billion for Moy Park, which only two years ago had cost JBS about $1.2 billion.

This will transform Pilgrim's Pride -- whose customers include Chick-fil-A and Kroger -- into a more global player. CEO Bill Lovette spoke on last month's earnings call of wanting assets that offer geographic diversity and help further reduce its commodity-chicken exposure. Moy Park, which processes more than 5.7 million birds per week, also makes prepared foods, the kind of products toward which Pilgrim's Pride has been shifting its focus. 

The deal comes on the heels of speculation this summer that Pilgrim's Pride was being stalked by Cargill, the closely held agricultural conglomerate. JBS said in July that Pilgrim's Pride isn't for sale under any circumstances, adding that the business is a "relevant part of its strategy." Indeed, to help pay that legal settlement.

With a net debt-to-Ebitda ratio of 1.2 before the deal, Pilgrim's Pride can certainly afford Moy Park. The company also estimates $50 million in annualized cost savings over the next two years. 

Profit Boost
Ebitda at Pilgrim's Pride will jump 18% as a result of the deal, by the company's calculation
Source: Pilgrim's Pride presentation

Looks like everyone can leave this yard sale pleased ... well, ya know, aside from the whole political corruption and bribery scandal.  

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Including debt, the transaction is valued at $1.3 billion, versus $1.5 billion when JBS bought Moy Park in 2015.

To contact the author of this story:
Tara Lachapelle in New York at

To contact the editor responsible for this story:
Beth Williams at