Brazil-based meat processing giant BRF has entered into a binding agreement to purchase a 26% stake in Saudi Arabia’s Addoha Poultry Co. This move, executed via the BRF Arabia joint venture in collaboration with the Halal Products Development Co. (HPDC), is aimed at enhancing BRF’s operational presence and expanding its portfolio within the dynamic food and beverage industry trends in the Middle East.
The agreed transaction is valued at SR316.2 million ($84.3 million), and is contingent upon obtaining regulatory approval along with certain standard conditions. BRF, which has established a presence in Saudi Arabia over the past fifty years, anticipates that this acquisition will position it as a key partner in supporting the nation’s food security objectives.
BRF Arabia, responsible for the initiative, is co-owned with BRF holding a 70% stake and HPDC, a subsidiary of the Public Investment Fund of Saudi Arabia (PIF), owning the remaining 30%. In a statement, BRF emphasized that “A shareholders’ agreement will be signed between BRF Arabia and the current shareholders of Addoha, ensuring effective participation in the management of the company and allowing the know-how of BRF and HPDC to contribute to the maximization of synergies between the entities.”
Furthermore, looking at BRF’s performance in the wider food and drink business, the company reported net revenues of 14.93 billion reais (approximately $2.5 billion) for Q2 2024, representing a substantial increase from 12.20 billion reais during the same quarter in 2023, marking a remarkable rise of 22.3%.
In addition, BRF posted a net income of 1.09 billion reais, contrasting with a net loss of 1.33 billion reais from Q2 2023. The operating income has significantly improved to 1.72 billion reais, recovering from an operating loss of 413 million reais observed in the previous year’s second quarter.
Notably, Marfrig has recently boosted its investment in BRF, now controlling over 50% of the Brazilian meat supplier. Last November, BRF decided to withdraw its plans to sell its pet food division, a decision made more than eight months after the initial announcement of the sale.
For professionals navigating evolving food and drink consumer trends, BRF’s strategic moves highlight its proactive approach to growth in this competitive landscape, aimed at reinforcing its position in the lucrative Middle Eastern market while enhancing operational capabilities domestically.
