Opposing views from Marfrig and Minerva on the deal in Uruguay

As WBR reported yesterday, multinationals Marfrig and Minerva issued separate statements this morning regarding the sale of Marfrig’s assets to Minerva in Uruguay. The statements reveal opposing views on the deal. While Marfrig considers that, with more than two years having passed since the timeline originally set for completing the “Uruguay Transaction,” the deal has lapsed, Minerva insists that it remains valid, pending the ruling of the Competition Promotion and Defense Commission (Coprodec).

Marfrig stated that “the suspensive conditions applicable to the transaction were not satisfied by the deadline and, therefore, the Uruguay Contract was terminated by operation of law, no longer obliging the parties to conclude the transaction.” The company added that the three plants “continue to operate fully.”

Minerva, however, rejected that interpretation. In its statement it said that it “disagrees with Marfrig’s allegation and understands that the contract remains in force.” It also recalled that the transaction “remains subject to the approval of the Uruguayan competition authority (Coprodec)” and assured that it “remains fully committed to obtaining approval for the Uruguay Transaction.”

Thus, while Marfrig considers the agreement terminated, Minerva maintains that the transaction is still valid and awaits the Uruguayan regulator’s ruling, expected in mid-October.

The agreement involved the sale of the three Uruguayan slaughterhouses for R$ 675 million (around US$ 125 million at the current exchange rate), subject to contractual adjustments.

In its latest proposal to Coprodec, Minerva had pledged to immediately divest Establecimientos Colonia, to be sold to the Indian group Allana for US$ 48 million, and to sell the Inaler plant in San José within a maximum of 24 months. With this restructuring, the company would operate five plants in Uruguay, including La Caballada in Salto.

Tensions between the two multinationals are rising, as their relationship is already strained. This follows Minerva’s decision to challenge the merger between Marfrig and BRF in Brazil, arguing that the new company (MBRF) would handle sensitive market information, since it shares a shareholder with Minerva: the Saudi fund Salic.