Beef processing giant Marfrig increases stake in Brazilian peer BRF to 31.66%

BRAZIL – Marfrig Global Foods, the world’s second-largest producer of beef after JBS, has increased its stake in BRF to 31.66% in an effort to diversify its holdings.

BRF is one of the biggest food companies in the world, with over 30 brands in its portfolio, among them Sadia, Perdigão, Qualy, Paty, Dánica and Bocatti.

The Brazilian company has a presence in more than 130 countries across the globe and reported revenues of US$7.82 billion in 2020.

The acquisition of additional stake in BRF comes two weeks after Marfrig revealed that it had acquired a quarter of its competitor’s shares for around US$800 million.

According to a Reuters, Marfrig has been buying up BRF shares in open market transactions and now holds 257,267,671 BRF common shares.

Marfrig previously claimed that its purchase of a 24% stake in BRF, announced last month, was part of its aim to diversify its holdings and that it did not intend to elect members to BRF’s board of directors or exert any influence over the activities of the company.

The Brazilian meat giant has now reiterated these intentions in a statement released to the press earlier this month.

“The acquisition of the aforementioned stake is aimed at diversifying investments in a segment that complements its industry,” the company said in a statement.

“Marfrig also informs that…[it] does not intend to elect members to the board of directors or exert influence over BRF’s activities.”

Marfrig’s decision to seek antitrust review of its purchase of the stake in BRF however, underscores the sensitivity of the investment despite Marfrig’s insistence that it is not seeking to influence BRF’s management.

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The transactions come around two years after the companies entered into talks to merge and create one of the world’s largest meat producers, however negotiations ended a few months later.

The new rafts of acquisitions by Marfrig are moving it closer to an offer threshold as prescribed by BFR bylaws.

According to Reuters, BRF’s bylaws require that an investor that reaches a 33.33% stake in the firm make a tender offer for the rest of its shares.

Earlier, BRF SA launched a bond buyback program, the company said in a securities filing on Wednesday.

According to the filing, the company is planning to buy back not more than $180 million of its 4.875% senior notes maturing in 2030.

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