Brazil Egg Producer Considers US Deal After Merger With JBS

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(Bloomberg) — South America’s top egg producer, fresh off a sale of a 50% stake in the company to meat producer JBS SA, said it is weighing a merger or acquisition to enter the US market.

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“No option is ruled out,” Márcio Utsch, chief executive officer of Mantiqueira Brasil, said in an interview. “It can happen through local production or partnerships with companies already operating in the market.”

The potential expansion follows Monday’s announcement that JBS bought 50% control of Mantiqueira Brasil, its first foray into the egg sector. That move — as well as the international plans — comes at a time when concern over the spread of bird flu is creating shortages in the US, sending egg prices soaring.

Mantiqueira is prioritizing the US as a new market, allowing it to expand beyond the Middle East, Africa, Asia and South America, said Utsch, a former CEO at Alpargatas, owner of the flip-flops brand Havaianas.

The company wants to produce cage-free eggs in the US, a category that makes up 15% of Mantiqueira’s sales in Brazil, Utsch said. As part of the growth strategy, Murilo Pinto, son of Mantiqueira’s founder and chairman Leandro Pinto, has been named CEO of Mantiqueira USA.

The American egg market is currently in upheaval, with supplies constrained by a bird flu outbreak that has led to soaring prices in supermarkets, while also boosting shares of US producers like Cal-Maine Foods Inc.

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At the same time, demand has been growing worldwide as more consumers see eggs as a source of healthy protein, JBS Chief Executive Officer Gilberto Tomazoni said in a separate interview.

As the world’s biggest chicken producer, JBS could leverage its poultry operations in the US, its largest market, as well as in Brazil, Mexico and Europe, to help expand the new egg business, Tomazoni said. He noted that both egg and poultry production have several inputs in common.

“The knowledge about other markets and countries is one of the points that JBS can help with and share knowledge,” Utsch said.

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