Brazilian meat giant Marfrig has received full approval from the country’s competition authority for the sale of its processing assets to local competitor, Minerva. However, this approval comes with conditions.
The Brazilian Administrative Council for Economic Defense (CADE) stipulated that Minerva must divest one plant to proceed with the acquisition of parts of Marfrig’s beef and lamb operations. This transaction, valued at 7.5 billion reais (approximately $1.3 billion at the time of announcement in 2023), had previously been granted conditional approval by CADE last month, indicating a cautious approach to maintaining competition in the food and beverage industry.
Minerva plans to acquire 11 cattle slaughter and deboning units from Marfrig across several Brazilian states, including Rio Grande do Sul, Mato Grosso, Mato Grosso do Sul, Pará, Goiás, Rondônia, and São Paulo. Additionally, Minerva will take over one plant in Argentina and another in Chile. However, the inclusion of assets from Uruguay was rejected by the country’s antitrust regulator back in May.
CADE expressed specific competition concerns regarding the potential for market concentration, notably concerning the expansion capacity at the Várzea Grande industrial plant in Mato Grosso and the sale of the Pirenópolis facility located in Goiás. In response, the regulatory body clarified that Marfrig could increase its slaughter and deboning capacity at the Várzea Grande plant, while Minerva would need to relinquish the Pirenópolis facility previously held by Marfrig.
Both Marfrig and Minerva acknowledged the regulator’s approval in separate announcements to investors, with Marfrig anticipating that the transaction’s closure and the plant’s sale will take place before the end of next month.
CADE further stated, “The measures announced for the deal’s conclusion are the most appropriate and proportional alternative to ensure the preservation of a balanced competitive environment,” aimed at mitigating risks linked to market dominance in the cattle slaughter and deboning sectors.
In related news, Marfrig remains the largest shareholder in the Brazil-based poultry group BRF, which controls the US beef producer National Beef.
As the food and drink business evolves, deals like this one highlight the ongoing trends within the food and beverage industry, emphasizing a focus on strategic mergers and acquisitions to enhance competitive advantages and cater to shifting food and drink consumer trends.
