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November 6, 2024
Fabio Sandri
President and Chief Executive Officer
Pilgrim s Pride Corporation
1770 Promontory Circle
Greeley, CO 80634-9038
Re: Pilgrim s Pride Corporation
Preliminary Proxy Statement
Filed October 25, 2024
File No. 001-09273
Dear Fabio Sandri:
We have reviewed your filing and have the following comments.
Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.
After reviewing your response to this letter, we may have additional
comments.
Preliminary Proxy Statement filed October 25, 2024
General
1. We note your disclosure that, "[T]he amendment will specifically provide
that, at any
time when JBS is an 80 Percent Holder, there shall be 10 directors on
the Board
consisting of eight JBS Directors and two Equity Directors." However,
this appears
inconsistent with the table in Annex A, which indicates that when the
JBS
Stockholder holds between 80-90%, there shall be seven JBS Directors,
one Equity
Director, and one Founder Director. Please revise Annex A to reconcile
this apparent
inconsistency, as well as the inconsistency between the table and the
proposed proviso
in the paragraph thereafter. Your revisions should clearly indicate, if
true, that in this
ownership scenario, the number of directors will be increased from nine
to ten, and
the board will be comprised of eight JBS Directors, two Equity
Directors, and no
Founder Director.
2. We note your disclosure that, "[T]he amendment provides that at least
two of the JBS
Directors will be financially literate and be independent under Rule
5605(a)(2) of the
listing rules of the Nasdaq Stock Market LLC and under Rule 10A-3 of the
Exchange
November 6, 2024
Page 2
Act." However, we are unable to locate this requirement within the
proposed
amendments, though we note the last sentence of the proposed amendment in
Annex
A, which is qualified by an ownership threshold. Please revise your
disclosure and/or
proposed amendments to Article 5.2 accordingly, or advise.
3. We note the rationale for the amendment is to enable your consolidation
with JBS
USA Food Company Holdings ("JBS USA") for U.S. federal income tax
purposes.
Your disclosure indicates that the second requirement for consolidation,
that JBS USA
own at least 80% of the total stock voting power, "is generally
determined by the
ability to elect directors" and is not currently satisfied because the
JBS Stockholder
only has seven of nine directors, or 77.8%. Please provide your legal
analysis,
including references to applicable tax code, regulations, and/or caselaw,
to support
your view that the JBS Stockholder must have the right to elect 80% of
the board and
the certificate must be amended, as proposed. Explain why, in light of
the ownership
it currently has, JBS does not already have the "ability to elect
directors" in excess of
the amount required. Discuss whether alternative actions could achieve
the same
result, whether those actions were considered, and why those actions were
rejected.
4. Considering the length of time JBS has owned a substantial number of your
shares,
please expand the disclosure about your rationale for this amendment to
explain why
you are proposing this amendment now as opposed to any other time.
5. Please revise to disclose the number and percentage of shares held by
non-JBS
shareholders that is required to establish a quorum and approve the
proposal, clearly
stating if none are required. If approval of the proposal is assured,
state so clearly and
directly.
6. Please revise your disclosure to describe material provisions of the
stockholders
agreement with JBS USA Holding Lux, S. .r.l. and tax sharing agreement
with JBS
USA, and file these agreements as exhibits to your proxy statement.
7. We note your disclosure that the consolidation "will benefit all of the
Company s
shareholders." Please address the following items in this regard:
The tax sharing agreement will require you to make payments to JBS
USA in an
amount equal to your tax liability determined as if you had filed a
separate tax
return. Revise your disclosure to clarify whether the payments from
JBS USA for
the utilization of your tax assets will effectively transfer any
tax-saving benefits of
consolidation to you, in whole or in part, or whether JBS USA will
realize all such
benefits.
You disclose that JBS USA will make payments to you for the
incremental tax
cost savings with respect to any dividends (up to $725,000,000) you
pay prior to
December 30, 2026, and estimate these potential payments as
$50,000,000; yet it
appears you have not paid dividends in recent years, and your Form
10-K
indicates you have no current intention to pay dividends and are
subject to certain
restrictions on dividends. Revise your disclosure to provide balance,
including
that no payment from JBS USA will be forthcoming unless your dividend
policy
changes, and assess the likelihood thereof in light of related
restrictions.
You disclose that the consolidation is expected to result in
"administrative and
cost efficiencies, including from filing a single consolidated tax
return for U.S.
November 6, 2024
Page 3
federal income tax purposes." Revise to clarify whether and how this
benefits
you, as opposed to JBS USA.
Revise your disclosure to discuss any negative factors that will
or may result from
the proposed amendment and ancillary agreements, and assess the
material related
risks to your minority shareholders.
8. We note that Article 5.2 continues to refer to one Founder Director at
each ownership
level, yet according to your Form 8-K filed on May 2, 2024, your current
board
consists of six JBS Directors and three Equity Directors. Please revise
your disclosure
and/or proposed amendments to Article 5.2 as appropriate to update and
clarify the
ongoing role, if any, of Founder Directors.
9. Please define all capitalized terms used in the proxy statement or,
alternatively, file as
an exhibit the certificate of incorporation or other document where such
terms are
defined.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence
of action by the staff.
Please contact Jennifer Angelini at 202-551-3047 or Geoffrey Kruczek at
202-551-
3641 with any questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
cc: Jeffrey Sherman