Mafrig Global Foods, SALIC acquire shares worth US$900m in Brazil’s poultry processor BRF SA

SAUDI ARABIA –  Saudi Agricultural and Livestock Investment Co. (SALIC) and Marfrig Global Foods SA,  have expanded their footprint into the meat industry by acquiring shares worth about US$900 million at Brazil’s biggest poultry processor, BRF SA.

According to BRF, SALIC offered to acquire 50% of the total offered new shares worth US$500 million while Mafrig Global Foods, which currently owns 33% of the business pledged to acquire the remaining US$250 million shares.

BRF provided terms of the proposed transaction, that the offer must be priced at no more than 9 reais (US$1.8) per share, which would represent a 23.8 percent premium over its closing price of 7.27 reais.

It added that the company’s shares surged as much as 15.7 %, making it the top gainer on Brazil’s benchmark stock index Bovespa while Marfrig stock rose around 5 %. 

This acquisition is the latest in a series of recent moves by Saudi Arabia to secure food supplies, diversify its economy and reduce its reliance on oil – all pillars of Crown Prince Mohammed Bin Salman’s Vision 2030 strategic plan.

The kingdom has ramped up its push into agriculture after the pandemic and Russia’s attack on Ukraine sent food prices to a record, upended trade flows, and laid bare the fragility of the world’s supply chains.

“Saudi Arabia has been BRF’s largest chicken importer in recent years, accounting by around 7 percent of its total sales,” analysts reported.

“The Kingdom has been keen to empower its food security while playing a significant role in global agricultural and livestock supply.” 

Such investments hold strategic significance for the Kingdom, considering its substantial demand for Brazilian meat products. 

Furthermore, SALIC holds a significant 33.83 percent ownership stake in Minerva Foods, a prominent Brazilian meat company, underscoring the significance of foreign investments in ensuring global food security.

Moreover, BRF and PIF-owned SALIC signed a memorandum of understanding last year to establish a joint venture focused on chicken production in Saudi Arabia, further strengthening their collaboration in the poultry sector. 

In December, Salic bought a US$1.24 billion stake in Singapore-based agricultural trader Olam Agri Holdings. A month earlier, the Saudi firm agreed to buy a 9.2% stake in Indian rice producer LT Foods Ltd.

Salic has also partnered with Brazilian meatpacker Minerva SA to acquire slaughterhouses and a lamb processor in Australia after buying farmland there.

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