Brazil’s BRF and Marfrig have entered into talks to merge their companies and potentially create one of the world’s largest meat producers.
BRF said it has signed a memorandum of understanding with Marfrig and that both firms have entered a 90-day negotiation period to study and define the terms of a potential deal.
The companies expect a combination to lower financial leverage and reduce exposure to risk. BRF said it would own a majority stake in the combined company.
Marfrig last year become the world’s second largest beef processor after acquiring a majority stake in Missouri-based National Beef Packing Company for $969 million.
In July, BRF set a target of raising BRL 5 billion ($1.28 billion) through the sale of assets as part of restructuring efforts.
The firm has since offloaded two Argentinian businesses – Avex and Campo Austral – and sold its Thai and European operations to Tyson Foods in a deal worth around $340 million.
In 2017, BRF was involved in the ‘carne fraca’ scandal in which officials from BRF, as well as a handful of other Brazilian companies, were accused of paying inspectors and politicians to overlook potentially contaminated or rotten meat, which was due for export.
© FoodBev Media Ltd 2019
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