BRAZIL – Minerva Foods and Marfrig Global Foods have announced that their asset transaction has received regulatory approval, marking a significant step forward nearly a year after the deal was first revealed. 

The transaction, valued at 7.5 billion reais (US$1.3 billion), involves Minerva acquiring various facilities from Marfrig across South America. 

Minerva Foods, established in 1924 in Barretos, São Paulo, is a prominent Brazilian food company. 

It focuses on the trade of fresh beef, leather, and by-products, along with live cattle exports and meat processing. 

Marfrig S.A., headquartered in São Paulo, ranks as Brazil’s second-largest food processing firm, following JBS. 

Marfrig operates 33 production facilities globally and maintains a presence in 22 countries, exporting its products to more than 100 nations.

Although initially planned to include 11 plants and a distribution center in Brazil, along with additional facilities in Uruguay, Argentina, and Chile, the deal has been scaled down following regulatory scrutiny.

The Brazilian Administrative Council for Economic Defense (CADE) gave its green light to the revised deal on August 9, 2024. 

This approval pertains to the assets located in Brazil, Argentina, and Chile. 

However, the portion of the transaction involving Uruguay was blocked by Uruguay’s anti-trust authority earlier in May, leading to a reduction in the scope of the deal.

Marfrig clarified that CADE’s approval comes with conditions, specifically the need for a concentration control agreement. 

This agreement necessitates adjustments to the material and geographic restrictions initially outlined in the deal’s expansion clause. 

Despite these modifications, Marfrig assured that the essential terms of the agreement and the transaction would remain intact.

In response to the approval, Minerva Foods noted that the merger control agreement includes revised terms concerning the non-compete clause and other covenants originally stipulated in the share purchase agreement. 

The agreement will now feature adjusted limits related to both material and geographical aspects, reflecting the changes imposed by the Brazilian competition authority.

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