Avian influenza is ravaging the United States, leading to a historic surge in egg prices. Dubbed the “Egg King,” Brazilian entrepreneur Ricardo Faria is making a foray into the US market through a $1.1 billion acquisition deal.
The private group Global Eggs, controlled by Brazilian entrepreneur Ricardo Faria, has agreed to acquire Hillandale Farms, one of the largest egg suppliers in the United States, for $1.1 billion.
Faria stated that this deal is part of the group’s international business expansion and is not related to the egg supply tension in the US caused by avian influenza.
In an interview with the Financial Times, Faria said, “Americans love to eat eggs. It is a market with very high consumption, and eggs are the fastest-growing item on the shelves or in supermarket carts.”
At the age of 49, Faria made it to the Forbes Brazil billionaire list last year, with an estimated wealth of 17.5 billion reals (approximately 3 billion US dollars).
Established last year, the Global Eggs group operates through Faria’s Brazilian company Granja Faria founded in 2006. In November last year, they made their first international move by acquiring Spain’s Grupo Hevo for 120 million euros.
Hillandale Farms, located in Gettysburg, Pennsylvania, was founded in 1958 by Orland Bethel. Since its establishment, the company has been operated by the Bethel family, remaining a family-owned enterprise.
Gregory Cessna, the Vice President of the company, stated that Hillandale agreed to the deal with Global Eggs because Faria “wants to maintain this business.”
The two parties have signed a binding acquisition agreement, with the completion of the transaction pending final approval.
Faria mentioned that this acquisition will double the production capacity of Global Eggs, headquartered in Luxembourg. While the acquisition of Hillandale involves some debt financing, Global Eggs’ net borrowing will remain below 1x EBITDA.
As part of the acquisition of Hillandale, the Brazilian investment bank BTG Pactual’s private equity division will invest $300 million to acquire an 11% stake.
Furthermore, Global Eggs plans to conduct an initial public offering (IPO) in New York.
Due to the avian influenza epidemic leading to the culling of chickens and causing an egg shortage, the United States has nearly doubled its imports of Brazilian eggs. The Trump administration is making efforts to address the egg shortage, and consumer demand for cage-free eggs is gradually cooling.
According to data from the US Department of Agriculture, the wholesale price of a dozen large white eggs dropped by one-fifth last week to $3.27, but it still remains significantly higher than prices from a year ago.