A meat behemoth to be created in Brazil
Meat companies BRF and Marfrig are keen to merge their operations, creating a giant in the meat sector with diversified production and annual revenue of roughly BRL 80bn. The two firms reached a deal for exclusive negotiations with each other for the next 90 days—extendable for an extra 30. The terms of the deal would give BRF 85% of shares of the new company, while Marfrig shareholders would control 15% of equity.
The move was announced after the market closed yesterday, but investors in New York welcomed it—BRF’s American depositary receipts (ADR) rose 6% last night. The new player would be able to sell beef, pork, and poultry on a large scale. The merger also gives BRF a foot in the U.S. market, where Marfrig owns National Beef. According to lawyers familiar with the deal, antitrust authorities should not oppose the merger, as BRF and Marfrig have complementary businesses with little overlapping in their operations.
If the merger prospers, it could change how markets perceive Pedro Parente’s tenure as BRF’s CEO—his term ends on June 17, after which he will serve exclusively as chairman of the...