Treasurer Joe Hockey has approved the $1.4 billion sale of Affinity Equity Partners’ Primo Smallgoods – Australia’s biggest pig processor – to JBS USA Holdings.
“Today I have approved the proposal by JBS USA Holdings Inc (JBS), through its wholly-owned subsidiary, JBS Smallgoods HoldCo Australia Pty Ltd, to acquire Australian Consolidated Food Holdings Pty Ltd (Primo), subject to a number of important conditions in relation to services currently provided by Primo at its abattoir located in Scone, New South Wales,” Mr Hockey said in a media release.
The decision comes after both the Foreign Investment Review Board (FIRB) and the Australian Consumer and Competition Commission (ACCC) greenlighted the deal.
According to the Treasurer’s media release, the approval is conditional on JBS’ guarantee that it will keep the Primo Group’s cattle abattoir in the NSW Hunter Valley at Scone open and available for consignment killings.
JBS is required to demonstrate its compliance every six months. Should the company fail to meet the conditions set forth by the Treasurer, he has the right to order the company to divest its acquisition of the Primo Group, which controls 51% of Australia’s smallgoods manufacturing sector.
JBS is the United-States based subsidiary of the Brazilian company JBS S.A., the world’s largest processor of fresh beef and pork. The company has ten processing plants in Australia, including a beef processing capacity in Dinmore and Toowoomba in southern Queensland.
JBS will use Primo as a starting platform to sell more branded meat products into Asia.
Primo is the largest ham, bacon and smallgoods producer in Australia and New Zealand. The company has a beef processing plant at Scone, NSW, and a pork processing plant at Port Wakefield, South Australia, as well as manufacturing facilities at Chullora, NSW, and Wacol in Queensland.
The two companies announced the agreement in November 2014. Numerous sources report that the Australian food industry supports Mr Hockey’s decision and the acquisition.
