Dive Brief:
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Minerva Foods has agreed to purchase several processing plants for $1.5 billion from beef giant Marfrig Foods, a deal that would nearly double its production capacity.
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The transaction, if approved by regulators, would add 16 meat plants to Minerva’s network in South America and increase its slaughter and debone capacity to 42,439 head per day.
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Marfrig, the world’s second largest beef processor after JBS, said on Monday it plans to retain only its larger-scale operations in order to focus on processed and premium meats.
Dive Insight:
Minerva and Marfrig, the parent of National Beef in the U.S. and BRF SA in Brazil, are two of the largest protein producing companies in South America. They have controlled a significant share of the global market for years.
The pending deal is representative of two powerhouses moving in different directions — Marfrig toward pre-cooked and value-added products, and Minerva in bulk wholesale cuts of beef.
In a presentation to investors this week, Marfrig agreed to sell a distribution center and 11 beef processing plants in Brazil (including three that are inactive); three beef facilities in Uruguay; one beef plant in Argentina; and a single lamb plant in Chile.
Marfrig said the deal is part of a larger plan to focus more on high-margin, value-added meat products. The company told investors it will continue to operate in South America’s beef market.
The total value of the transaction is 7.5 billion reais (or about $1.5 billion), with 1.5 billion reais due on the signing date and the remaining 6 billion reais at the closing date.
“This will take our company to another level,” Fernando Queiroz, Minerva’s CEO, said in a statement. “We are very excited about this move.”
With this move, Queirvoz said Minerva will become more competitive in the regional and global animal protein markets by growing its customer base and reducing its risk with greater scale.
The beef exporter said the additional assets will increase its slaughter and debone capacity by 44% and expand its access into premium markets.
Minerva would have 40 beef plants across South America if the deal goes through.
