Brazil's Marfrig sells abattoirs to Minerva in $1.5 billion deal
By Peter Frontini
SAO PAULO (Reuters) -Brazilian meatpacker Marfrig has agreed to sell 16 slaughtering plants to rival Minerva for 7.5 billion reais ($1.54 billion) in a deal that will significantly change its profile in South America, according to a securities filing.
With the sale, Marfrig, which also controls U.S.-based National Beef and BRF SA (NYSE:BRFS) in Brazil, will retain only its larger-scale industrial facilities in the region in a bid to focus on production of processed meat products.
The move marks a shift away from a commoditized business model for Marfrig while competitor Minerva, one of South America's largest beef exporters, goes in the opposite direction.
A spokeswoman for Marfrig told Reuters the plan is to focus on sale of higher-value branded processed meat products and premium fresh cuts in South America.
She said the plants being sold represent some 40% of Marfrig's sales in South America.
The units being divested, including three currently idled, are located in Chile, Brazil, Argentina and Uruguay, Marfrig said in the securities filing. Most process cattle while one in Chile processes lamb.
Marfrig said it had received a down payment of 1.5 billion reais, with the remainder to be paid at the deal's closing date, which is still unconfirmed pending shareholder and regulatory approvals.
Minerva said in a separate filing it had received a firm financing commitment from J.P. Morgan.
($1 = 4.8731 reais)
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