The 'ayes' have it
Feb. 6, 2015
by Erica Shaffer
Search for similar articles by keyword: [JBS SA
MELBOURNE, Australia – JBS's proposed acquisition of Primo Smallgoods Holdings got the greenlight from the Australian Competition and Consumer Commission (ACCC).
The regulator said it would not oppose JBS's plan to acquire Primo, a deal valued at $1.25 billion. The commission considered whether the acquisition would negatively impact consumers, small goods customers or the provision of fat cattle service kills, but found no serious competition concerns.
JBS said in November 2014, when the deal was announced, that the company expects incremental annual revenues of approximately $1.6 billion and earnings before interest and taxes (EBITDA) of $150 million. Additionally, the company expects the deal to produce $30 million in synergies.
“The ACCC undertook a detailed assessment and determined that Primo is currently not a strong competitive constraint on JBS,” ACCC Chairman Rod Sims said in a statement. “JBS’s abattoirs in Queensland and Primo’s abattoir at Scone are more than 500km apart. “Furthermore, the increase in market share as a result of the proposed acquisition would be relatively small and JBS would continue to be constrained in the market for the acquisition of fat cattle by a number of alternative abattoirs and supermarket chains, in the northern NSW [New South Wales] and southern Queensland region.”
While the ACCC found the acquisition was unlikely to raise significant competition concerns, the agency expressed concern over the potential impact of further consolidation of abattoirs.
“The ACCC will continue to monitor this industry and any future acquisitions will face additional scrutiny,” Sims said.