JBS has won antitrust approval from US authorities for the takeover of bankrupt chicken giant Pilgrim's Pride, clearing the way for the creation of the world's biggest meat company.

Both America's Federal Trade Commission and Department of Justice have approved the deal, which will see Brazil-based JBS pay $800m for 64% of Pilgrim's Pride, America's second-ranked chicken group.

The last major hurdle for the deal is approval from the bankruptcy courts, with which Pilgrim's Pride sought sanctuary last year, saying it had been squeezed by raised feed costs at a time when a US poultry surplus was undermining prices.

"Today is an exciting day for JBS and Pilgrim's Pride," Wesley Batista, the JBS chief executive, said.

"As a successful US beef and pork company we believe we are well positioned to bring that same competitive energy to Pilgrim's Pride, its employees and customers."

JBS shares stood R$0.01 higher at R$9.97 in afternoon trade in Sao Paolo. 

Sales tax boost

The rapid approval is a markedly different outcome from the last time JBS attempted a US deal, with the group in February abandoning plans to buy National Beef Packing Company after it stirred up opposition from the Department of Justice and some US states.

And, in a second fillip, JBS revealed Brazil's government had exempted the country's beef industry from paying local sales taxes, which are applied at a rate of 9.25%.

"This exemption represents a very positive move on the part of the Brazilian authorities and benefits the whole production chain," JBS said.

The government has applied a number of measures to support its beef industry, which has suffered a string of bankruptcies since the global economic crisis, and European import curbs, dried up exports, leaving the domestic market with a glut which forced down prices.

Bonus time 

In a separate announcement, Pilgrim's Pride revealed that it had signed a management bonus plan which will pay out if the company achieved underlying earnings above $225m over the second half of its financial year.

The plan, which has received bankruptcy court approval, has been set up to "advance the interests of the company and its stockholders by establishing a direct relationship between the payment of cash bonuses... and the performance of the company", a filing said.

The group in August reported its first quarterly profit since 2007.