NEWSMAKER-For Brazil’s Batistas, Sara Lee is a watershed

* Batista is son of founder of world’s biggest meatpacker

* Must ease concern over high leverage, low margins

* Bold style mixes with aggressive expansion moves

* Investors will look at Batista’s fundraising plan

By Marcelo Teixeira and Roberto Samora

SAO PAULO, Dec 21 (BestGrowthStock) – For the Batista family of
jeans-wearing, self-styled cowboys who run the world’s largest
meatpacker, their latest takeover plan could prove to be their
version of high noon at the O.K. Corral.

Half a century after buying a modest butcher shop in rural
Brazil, the Batistas and their powerhouse firm JBS (JBSS3.SA: )
are negotiating what could be their biggest acquisition yet —
the purchase of all or part of U.S. food producer Sara Lee
Corp. (SLE.N: ) [ID:nN19146410]

Yet with the company’s stocks and bonds under fire because
of rising debt levels and eroding profit margins, the family
will have to summon all its clout to stare down over skeptical
investors who believe their aggressive expansion plan may have
finally gone one step too far. [ID:nN20189840] [ID:nN20108119]

For Joesley Batista, the firm’s 38-year-old CEO, as well as
his father and two brothers, the success of the deal could come
down to whether they are able to employ their unique mix of
easygoing charm and business acumen to win over government
officials and bankers critical to the deal.

“These are audacious guys,” said Cesar Castro Alvez, a
consultant with Sao Paulo-based MB Agro. “I wouldn’t be
surprised” if Batista and his brothers, Wesley and Jose Jr.,
“come up with a deal,” he said.

Camera-shy Joesley, who always wears jeans and his sleeves
rolled up, is likely to conduct talks personally with the board
of Sara Lee — just as he did when JBS bought control last year
of Pilgrim’s Pride and Brazilian rival Bertin.

“He is a daring CEO,” said Ricardo Almeida, a corporate
finance professor with Sao Paulo-based Insper business school,
who said Joesley and his two brothers learned to become
aggressive buyers of rivals about two decades ago.

Largely unknown outside of Brazil until a few years ago,
JBS began in the 1950s when Joesley’s father, Jose Batista
Sobrinho, started buying cows in Goias and selling them to meat
packers. In 1957, he set up one of the first regional
slaughterhouses, not far from Brasilia, Brazil’s then-new

In the late 1980s, JBS started gobbling up rivals and set
up a national chain of plants. A major shift in the company’s
growth strategy came in the following decade, when it began
exporting fresh beef.

In contrast to other groups, JBS often bought plants —
many of which were in a fragile financial situation — instead
of building them, which made the growth process faster.

Currently, the siblings run JBS’s day-to-day operations
while their father visits the company’s cattle ranches around
the country’s vast midwest savanna, hopping from one farm to
the next by helicopter.


Almeida said Joesley Batista’s management style shows a
great knowledge of the global beef business.

His Portuguese accent resembles those of Brazilian midwest
savanna residents, and his tone is affable. The Batistas are
business people with an endless willingness to talk, Marcus
Vinicius Pratini de Moraes, a former agriculture minister who
is now a member of JBS’s board, told Reuters last year.

Joesley and Wesley, who currently runs the U.S. unit of the
company, dropped out of college and learned their trade early.
While investors value that, they are also concerned that quick
growth that began since the 2005 acquisition of Swift Argentina
is not being followed with proper integration.

If Joesley Batista manages to clinch the Sara Lee deal, it
is likely that investors in the company will demand he first
integrate all the recent acquisitions while dealing with the
company’s growing debt — which is trimming operational profits
and reducing margins.

“After this quick expansion, it is hard to say that there
is a strong JBS culture ingrained in the business,” said
Ricardo Kovacs, an analyst with Moody’s Investors Service in
Sao Paulo.
(Additional reporting by Guillermo Parra-Bernal and Inae
Riveras in Sao Paulo, editing by Matthew Lewis)

NEWSMAKER-For Brazil’s Batistas, Sara Lee is a watershed