U.S. Premium Beef, LLC (USPB) and National Beef Packing Company, LLC (National Beef) announced Friday that the Membership Interest Purchase Agreement with JBS S.A. (JBS), previously announced on March 4, 2008, has been terminated.

Likewise, JBS S.A. informed its shareholders Friday that the company was ending its litigation with the U.S. Department of Justice (DOJ) and would no longer pursue its acquisition of National Beef.

JBS announced the acquisition March 5, 2008. In October, DOJ filed a complaint to challenge the purchase. Since that time, JBS had worked to find a solution agreeable with DOJ that would allow them to move forward with the purchase – $970 million, including the assumption of National’s debt at the time (about $420 million).

When DOJ blocked the purchase, Wesley Batista, JBS USA's president and CEO said, "We disagree with DOJ’s decision to try and block this transaction. This transaction is highly pro-competitive and will generate significant efficiencies and synergies that will benefit our cattle suppliers and our beef customers.”

Opponents worried that JBS would have an unfair competitive advantage, what with its purchase of Swift and Company and Smithfield Foods beef division.

“Would you rather have five or six of the largest beef packers barely getting by, or would your rather have three possessing the financial and intellectual wherewithal to take your product, harvest it and retrieve the most value for it from the global market place?” wondered Chandler Keys, vice president of government and industry relations for JBS-Swift last summer. “The packers that are the most innovative, efficient and adept at marketing are the ones who will win in the global marketplace.”

John Miller, CEO of National Beef, said Friday, “this development has re-energized our management team. With our strong liquidity position and numerous opportunities to grow our business – both internally and externally – we are eagerly looking forward to building on our value-added model while continuing to focus on serving the needs of our customers.”

Steve Hunt, CEO of USPB said Friday, “although this isn’t the outcome we anticipated, we are excited to continue the growth and success of our business on a stand-alone basis. As demonstrated by our fiscal year 2008 and first quarter 2009 financial results, National Beef’s value-added business model, rooted in strong relationships with cattle producers and beef customers, continues to generate industry-leading profits.”