Colorado-based JBS USA will fire up its JBS Food Canada Inc. subsidiary Monday by closing the purchase of several XL Foods operations located north of the 48th parallel, including the troubled Lakeside beef processing plant in Brooks, Alberta.
In the purchase, JBS Food Canada will acquire the 4,000-head-per-day beef packing plant at Brooks, XL’s 1,000-head-per-day beef packing plant at Calgary, a 70,000 head feedlot at Brooks and 6,600 acres of surrounding Alberta farmland.
XL Foods only acquired the Lakeside beef packing plant from Tyson Foods in 2009. But last year, an E. coli crisis at the beef packing plant brought about its shutdown. It only re-opened in October after XL turned over management to JBS under a 180-day purchase option.
The E. coli crisis caused the Lakeside plant to issue the largest beef recall Canadian history after it became associated with an outbreak involving at least 16 illnesses than spanned four provinces.
Government approvals for the sale of the XL units in Canada came in December, but permission to sell some XL properties in the U.S. still requires regulatory approvals. About 40 U.S. agricultural organizations have protested the sale on anti-trust grounds. If approved, JBS stands to pickup a 1,200 head beef packing plant in Omaha, and a 1,000 head facility in southwest Idaho.
The JBS purchase agreement for the XL operations in both the U.S. and Canada totals $100 million in a half cash, half stock deal.
“Today, JBS officially enters the Canadian beef market through our acquisition of the XL Lakeside beef packing plant,” said Bill Rupp, president and COO of JBS USA Beef. “After several months of careful consideration of the option and nearly three months of successfully managing the Lakeside facility, we have determined that the Canadian operations will serve as an important asset to our strategic global beef production model. We look forward to partnering with Canadian producers to deliver quality Canadian beef to customers around the world.”
With the acquisitions in Canada, JBS USA becomes the largest beef producer in North America. Its Brazilian-based part, JBS SA, is already the largest beef producer in the world with 120,000 employees at 140 production facilities worldwide.
JBS USA headquarters is located in Greeley, CO, about 30 miles north of Denver.