Alberta gov’t pleased Regulatory approval still needed from U.S. gov’t for U.S. operations
It’s official. The Brazilian company that has been operating one of Canada’s largest beef packing plants since October is buying the beleaguered facility.
“That’s great news. For us, it’s absolutely the best news,” said Dave Solverson, vice-chair of the Canadian Cattlemen’s Association.
The Canadian cattle feeding industry would have collapsed if JBS USA, a subsidiary of JBS S.A., hadn’t taken over XL Foods’ processing plant in Brooks, Alta., said Solverson.
“There would have been a lot less cattle processed in Canada,” he said. “I think a lot of cattle would have gone to the U.S. as feeders.”
JBS USA had the option to buy the XL plant for $50 million in cash and $50 million in JBS S.A. shares when it took over management of the 4,000 head per day plant in October.
XL Foods was closed at the time following the largest meat recall in Canadian history. At least 18 people in Canada were sickened by E. coli O157:H7, which was traced back to meat from the Brooks facility.
JBS officials have gone through the plant for the past three months to see if it was worth buying at a rock bottom price from the Nilsson Bros.
Nilsson Bros., an Alberta company, bought the Brooks plant, feedlot and 7,500 acres of land from American food processing giant Tyson Foods in 2009 for $145 million.
“Today, JBS officially enters the Canadian beef market through acquisition of the XL Lakeside beef packing plant,” JBS USA Beef president Bill Rupp said in a Jan. 10 news release. The change of ownership was expected to be complete Jan. 14.
Alberta Beef Producer chair Doug Sawyer said JBS’s purchase of the XL plant is a sign it believes it can work with the Canadian Food Inspection Agency.
“It’s a sign of confidence with our marketplace,” said Sawyer.
Alberta agriculture minister Verlyn Olson said he is pleased with the announcement.
“This is very good news for Alberta and Canadian beef producers, the employees of the plant, the community of Brooks and the owners and operators of XL Foods Inc.,” he said.
The provincial government waived the province’s foreign ownership of land rules in December to allow JBS to buy the feedlot and 7,500 acres of land near Brooks. An old packing plant in Calgary was also part of the deal.
JBS is still awaiting regulatory review from U.S. authorities before exercising its option to buy XL’s U.S operations.
JBS does not assume any of XL Foods’ debt or liabilities.
Sawyer said he continues to be frustrated by the slow pace of the investigation into what went wrong at the XL plant.
“It we don’t learn anything from this, it will be a total disaster.”
Patrick Bieleny of Nilsson Bros. declined comment.