NACOGDOCHES, TX (KTRE) - Two weeks of speculation that Pilgrim's Pride corporation is being sold to Brazilian beef producer, JBS, is confirmed. The East Texas based Pilgrim's Pride will sell 64% of its stock to JBS for $800 million. The sale of Pilgrim's Pride stock to JBS has not yet been approved by the bankruptcy court. Pilgrim's Pride says they plan to be out of bankruptcy by the end of this year.
The news is big in East Texas where poultry is big business. There are growers, hatcheries, and processing plants in Nacogdoches and Lufkin. Then there are all the suppliers and services that rely on the industry and its thousands of employees.
Mike Meador is most at home on the farm, where he grows poultry for Pilgrim's Pride. Wednesday, meetings brought him to town, but talk around the water cooler was the sale of Pilgrim's Pride.
"I really didn't think Bo Pilgrim would sell something that's so close to his heart," commented the Nacogdoches Farm Bureau president.
The patriarch of the company, now in poor health, always took pride in having an American company with headquarters in Pittsburgh, Texas. In talks to civic clubs he would hand out little Bibles with $20 bills tucked inside. It was his way of telling people you can start something with just about nothing, exactly what he did with Pilgrim's Pride.
Even Bo Pilgrim saw something had to be done to bring his company out of Chapter 11 bankruptcy. The problems started when Pilgrim's wrote off $600 million in one quarter to buy out a competitor. In the whirlwind of uncertainty faithful employees would call their company's founder "greedy" with a desire to be number one in the industry at the expense of others.
The news is good, following a year and a half of uncertainty for contractors.
"The company's existence was threatened," recalled David Alders, a Pilgrim's Pride contractor. "And, all of us were in such a state of anxiety not knowing whether we had a future with Pilgrim's Pride or whether the company itself had a future. If you look at it in that light than we have to be very optimistic and very pleased."
Those within Pilgrim's Pride circles say the plants located in East Texas are the most profitable and the most modern. So their thinking is that the new owners will rely on this region to help them reach their goals. JBS is the nation's leading meat and pork producer. The company is anticipating Pilgrim's Pride position will allow JBS to successfully enter into the poultry market.
"I'm assuming they're going to need the management that they have presently. I assume they're going to need the contract growers that they presently have," Alders said. "So it appears to me to be great news and it looks like Pilgrim's is going to emerge with the capital they need to prosper as a chicken producer going forward."
For Meador, that pit in the stomach feeling he had a year ago is replaced with optimism.
"It's gotten a little better actually," Meador said. "I've got a little more confidence that we will stay in the poultry business."
Both men agree, despite the difficulties, the Pilgrim's Pride name isn't damaged and will remain an important to all of East Texas.