Marfrig to acquire OSI units in Brazil and Europe
25/06/2008
Brazilian meat packer company Marfrig Frigoríficos e Comércio de Alimentos (MRFG3), has signed a purchase agreement for $680 million to acquire 15 industrial units belonging to US company OSI Group in Brazil and Europe. All the units operate in the processed meat sector and have a combined net revenue of $2 billion.
Payment of the amount negotiated includes $400 million in cash and the remaining $280 million in Marfrig ordinary shares to be issued at market value when the transaction is completed. The deal may involve another $220 million based on the future performance of recently acquired European businesses.
“These investments reinforce Marfrig’s strategy to access international markets directly, diversifying and expanding its activities. At the same time, we will speed up our growth in the processed, industrialised and added value product markets. We shall strengthen our brands in South America and reach the most demanding customers in the global market more efficiently,” said Marfrig’s director of investor relations, Ricardo Florence.
OSI's companies in Brazil are Braslo Produtos de Carnes, supplier of added value beef and poultry products to fast-food chains; Penasul Alimentos (owner of the Pena Branca brand operating in southern Brazil) which produces chicken and pork products; and Agrofrango Indústria e Comércio de Alimentos, which operates chicken abattoirs with integrated vertical production.
In Europe, Marfrig will buy the Moy Park Group from Ireland and its units in England, France and the Netherlands, with a combined daily production capacity of 774 tonnes of processed and in natura meats sold to retail chains such as Tesco, Sainsbury, Mc Donald’s and KFC.
Marfrig is planning to expand its potential for production of processed meats in Brazil. At the same time it will have a direct access channel into the EU market and occupy the position of fourth largest beef producer and one of the ten largest poultry processors in the world.
The transactions are expected to be completed in the second half of the year.
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