JBS Takes Over Lakeside!

[ASRG]

We'll see how the union boy likes them when the contract comes due, or maybe when they finally shut the doors?
$100 million for three plants? Brooks, Nebraska, Idaho....why do I get the feeling probably the Nebraska and Idaho plants were what they really wanted?...they really don't like much competition? $50 million a plant and throw Brooks in the garbage can?

How can you buy a business and not assume the debts and liabilities?

JBS are no angels. You don't become the biggest packer in the world by acting like a choirboy!

They are probably licking their lips thinking of how they are going to screw the idiots in the Alberta and Canadian governments.

But don't worry Jerry Ritz and Alison Redford will have our backs!

[cpallett]

I wouldn't count on Lakeside reopening just yet. As ASRG points out, JBS is the biggest player in the US and will be picking up two more US packing plants on this deal.

The main point of the recent CAPI report is that our beef balance of trade with the US has dropped to almost zero from $1.4B in 2002.

Given that processing is cheaper in the US combined with the state of the Canadian dollar, maybe JBS's long term plans include mothballing Lakeside just as soon as they get XL's customers on board. After all, the big retailers could care less where the beef comes from, and JBS is in the game to maximize profits.

All of this brought to you without the public scrutiny that would normally accompany such a takeover.

ASRG, it is called an 'asset sale'. JBS is buying the plants and the land they are sitting on, not XL Foods itself. That way XL Foods retains the debts and all other liabilities (including the lawsuits), while JBS gets clear title to the plants.

[ASRG]

Thanks Cam
I guess the creditors and people sueing would have to go after XL Inc. then?
Could they go after Nilsson Brothers Inc. as well?
Why do I get this feeling Nilssons are going to slide out the back door on this one?

[cpallett]

Yup, they will have to go after XL Foods Inc.

The cornerstone of corporate liability is that it is limited to the corporation itself and does not flow over to the owners, directors or shareholders except in very unusual circumstances.

[kato]

Since this all started, everybody here has always said that there was more to this thing than what we were being told. This answers a lot of questions.

Why no public apology or effort to make things right? Because they were going away anyhow.

Why so difficult to find someone in charge at XL to ask questions of? Because they were all in meetings with JBS.

Why no public inquiry? Because they were going away anyhow. And it looks like the politicians were in on this one.

Why was our so called Ag Minister so elusive? Because he knew all about this deal.

I'm happy that there won't be a total shutdown of the plant right away, but I'm worried about the future.

Have we jumped out of the frying pan and into the fire? I guess time will tell.

[ASRG]

Now maybe I'm being too much of a cynic here or something, but how long was this JBS deal being cooked up? I doubt it only came into play over the last few days? How long were they talking? Were they talking long before September 3rd?
Was a "crisis" needed to get around a lot of controversy about foreign ownership and packer concentration....lets face it this deal will get a rubber stamp from Ritz and Harper....now!
Was a "crisis" needed to walk away from debts that couldn't be paid? Debts that the Alberta government guaranteed?
Was this a case of taking advantage of a "crisis" or was it a manufactured "crisis"? What role might the CFIA play if this was a manufactured "crisis"? How about Gerry?

We need an independent inquiry into this thing. An inquiry headed up by a judge!

[gcreekrch]

Why? XL is a private company. If any of us had a problem that caused us to sell our properties would it be a public issue?
I too wonder about the whys and hows in this issue but other than govt. involvement this issue is none of anyone's business but the 2 players involved.
Am I happy with the situation and do I think it is a change for the better? No.

Still doesn't make it my business.

[grassfarmer]

JBS won't be buying into this deal to secure the two
US XL plants - they already have huge amounts of
underused kill capacity in the US. Maybe instead
they see an opportunity to break out of the US
market - maybe see an opportunity to market
Canadian beef off the north American continent?
Maybe wishful thinking but I'm a glass half full kind
of person.

[ALLFARMER]

Immediate enhanced access to world markets.

Under what scenario would cattle prices go down
by this????

They would soon find a further shrinking calf
supply.

[GaryE]

I do think there is potential now for the development of Pacific markets...JBS Swift can supply all of the US products it needs and its easier to get to Japan from Vancouver than Brazil...Hats off to Nilssons for getting in another player..good move. They did have oversights in their plant and it's caught up to them and now they've paid the piper...
I can't say the same for CFIA We still need answers for their "non-existance" when independent audits showed discrepancies in the XL plant as early as last May. We need accountability..not more regulations...we need confidence that our food surveilance system works...not more legislation...We need answers soooo.. Sheri, keep asking the questions.