SÃO PAULO — Brazilian meat company Marfrig Global Foods S.A. recently announced its plans to merge with BRF S.A.
The two sides proposed in public disclosures that the new business would be named MBRF Global Foods Company S.A., if approved.
According to their material fact sheet, the combined business would increase revenue and reduce costs, estimated at 485 million reais ($85.6 million) per year.
The companies expect to generate 320 million reais ($56.5 million) in expense reductions from synergies within the new business, including the unification of commercial and logistics operations, consolidation of operating systems and optimization of the corporate structure.
Total impact on EBITDA is 805 million reais annually.
During the past 12 months, Marfrig and BRF listed their net sales at 152 billion reais ($26.8 billion).
In the deal, BRF shareholders, except for Marfrig, would receive 0.8521 common shares of Marfrig for each common share of BRF on the transaction’s closing date. BRF would also become a wholly owned subsidiary of Marfrig.
A presentation released by both companies showed Marfrig’s controlling shareholder having a 41.5% stake in the new business.
Saudi Agricultural and Livestock Investment Co. (SALIC), a current shareholder in BRF, would receive a 10.6% stake with the merger. BRF’s other shareholders would have a 32.3% stake and Marfrig’s other shareholders would have a 15.6% stake.
In the last few years, Marfrig has continued to grow its shares in BRF. Starting in 2021, it purchased a 24.23% stake in BRF. By September 2023, the company bumped its stake up to 40.05%. By the beginning of 2024, Marfrig became the majority shareholder of BRF.
In 2018, Marfrig acquired Kansas City, Mo.-based National Beef Packing Co.