XL Foods has signed a management agreement with JBS USA, the largest animal protein company in the world, XL Foods announced on Wednesday.
JBS will be taking over management of certain XL Foods operations in the Brooks, Alberta and a Calgary beef plant, XL Foods said in a press release.
The agreement provides JBS an exclusive option to purchase the Canadian and U.S. operations of XL Foods, JBS USA said in a release.
"We know full well the commitment it takes to manage world-class operations that produce safe and nutritious products for consumers around the world to enjoy," said Bill Rupp, President and COO, JBS USA Beef.
"We believe our experienced team will prove an invaluable asset in the management of XL Lakeside and we look forward to exploring our options to purchase XL assets in the near future," he added.
The Brooks plant, which is one of Canada's largest beef producers and one of southern Alberta's largest employers, will continue to manage its other Canadian and U.S. operations during this period of time.
"This action is another positive step to relicensing the XL Lakeside beef plant in Brooks, Alberta. We welcome the assistance of JBS and their resources," said Brian Nilsson, Co-CEO of XL Foods.
The management agreement gives JBS the option to purchase properties including XL's Brooks and Calgary beef plant and their U.S. beef packing operations.
The agreement also includes the option to purchase Lakeside Feedyards, a feedlot and farming operation near Brooks, Alberta, the release adds.
JBS says it will not assume any of XL Foods' debt or liabilities if it does decide to purchase these properties.
The company has agreed to pay USD $50 million in cash and USD $50 million in JBS S.A. shares if it does decide to go ahead with the purchase.
A spokesman for the Canadian Food Inspection Agency said that any change in management or ownership at XL Foods won't affect CFIA's assessment.
A recommendation on next steps will be based solely on these observations and test result, CFIA adds.