Brazilian meat producer JBS has entered into an agreement to acquire local poultry processor Agroveneto for BRL$128m ($62.85m), in order to strengthen its presence in the poultry sector in the country.
The deal, which is subject to approval from the JBS board and regulatory authorities, will be financed through BRL10m ($4.91m) worth of JBS shares and the rest as debt assumption.
Agroveneto, based in the southern state of Santa Catarina, is involved in the production of chicken products for the domestic and export market, primarily to Asia, Europe and the Middle East.
The company's plant has the capacity to process 140,000 birds per day and produces 30 different products such as chilled and frozen cuts, spiced and breaded products, and a line of individually quick frozen (IQF) products.
The acquisition of Agroveneto complements JBS's operations in the poultry segment in Brazil, a company statement said.
Following the acquisition, Agroveneto will become part of JBS's poultry division JBS Aves, which has four facilities in Brazil, and will boost the division's daily processing capacity by 10% to 1.34 million birds.
JBS, which produces fresh, chilled and processed beef, chicken and pork, entered into the Brazilian poultry sector in 2012 when it leased the assets of local poultry processor Frangosul, a company controlled by the French group Doux.
JBS already owns a major poultry business in the US through its subsidiary Pilgrim's Pride, which it acquired in September 2009.
Brazil is a leading producer and exporter of poultry products, helped by the country's production of grains which are used in feed.
