BRF and Marfrig Begin Talks to Form New Global Meat Giant

Two of the largest animal protein companies in the world hit the last details of the deal that will create a global colossus with leadership of the world's top markets and revenues of $ 80 billion.

Throughout the week, major shareholders and executives at Brazil Foods (BRF) and Marfrig Global Foods, two of the largest animal protein producers in the world, held a series of closed-door meetings to set the details for a possible merger. 

BRF, admitted that the parties are deepening their studies to define the terms of a final agreement and reaffirmed that the new company, still without a name, will be among the leaders of the sector in Brazil, The United States, Latin America, the Middle East and Asia.

The preliminary terms of the transaction do not foresee any disbursement of cash, based on an exchange of shares that will result in the attribution of 84.98% of the resulting shareholding to BRF shareholders and 15.02% to Marfrig shareholders, "BRF reported.

                                        Abilio Diniz

The former chairman of the board of directors of BRF, Abilio Diniz, 82, would have disagreed with the initial terms of the merger and announced that it would leave the company permanently. Abilio's decision, which was cited as the source of numerous internal conflicts in recent years, would have been welcomed by shareholders. 

Marfrig is the fourth largest meat company in the United States, a market in which BRF has an irrelevant operation. BRF is already a leader in the halal market of the Middle East. The merger would generate synergies, reduce geopolitical risks, allow for a lower cost of capital and allow for gains for investors from both companies.

                                        Marcos Molina

The merger plan was well received by the financial market, especially as it brings a long-term perspective to the company. In ten days, President Pedro Parente's term will end. He will be at the head of the board and will be replaced by executive Lorival Luz. Despite the uncertainties generated during periods of command change, most brokerage firms and investment analysts have recommended buying shares of the two companies throughout the week. potential of appreciation above 20%.