Brazil’s Administrative Council for Economic Defense (CADE), the country’s antitrust authority, approved last Friday, without restrictions, the merger between Brazilian meat companies Marfrig and BRF, creating a multinational with annual revenues of 152 billion reais (about 28 billion dollars).
BRF is one of the world’s largest producers of poultry and pork, as well as processed foods, while Marfrig is one of the world’s largest beef producers.
CADE’s decision clears the way for the agreement under which Marfrig, already BRF’s largest shareholder, incorporates all the BRF shares not under its control. BRF shareholders, in turn, will receive 0.8521 Marfrig shares for each of their own.
The merger had been challenged by another Brazilian meatpacker, Minerva, which claimed the creation of a monopoly in Brazil, prompting CADE’s review of the transaction.
However, CADE’s tribunal rejected Minerva’s appeal as a third party and approved the merger process unanimously and without restrictions, paving the way for the creation of the new company called MBRF Global Foods.
According to the regulator, the combined market share of the two companies in Brazil’s meat sector does not reach 20%, and therefore cannot be considered a monopoly.
The new company, with operations in 117 countries, a combined annual food production of 8 million tons, and brands such as Sadia, Perdigão, and Bassi, will compete globally for market leadership with fellow Brazilian company JBS, the world’s largest meat producer.
Source: EFE
