Brazilian meat companies Minerva Foods and Marfrig have confirmed that Uruguay’s competition regulator has blocked part of a $1.5bn deal between them. The Competition and Promotion Defense Commission (Coprodec) in Uruguay has prevented the sale of three Marfrig-owned plants to Minerva, which was valued at 675 million reais. Despite stating that they had not received any communication from Coprodec initially, both companies acknowledged the regulator’s decision in statements on 21 May.
Minerva clarified that the blocked deal only affects the acquisition of the three Uruguayan plants, while the purchase of other facilities in Brazil, Argentina, and Chile is still pending approval from Brazil’s anti-trust authority, CADE. The company emphasized that they are evaluating Coprodec’s decision, which is subject to appeal and expected to be finalized soon.
The remaining components of the deal include eleven beef plants, a distribution center in Brazil, an industrial unit in Argentina, and a lamb plant in Chile. When the purchase was first announced, it was projected to increase Minerva’s cattle slaughtering and deboning capacity by 44% to 42,439 head per day, with the plants’ net revenue boosting Minerva’s annual revenue to over 50 billion reais.
In the first quarter of fiscal 2024, Minerva reported a 12.6% increase in net revenue to 7.19 billion reais, accompanied by an 18.2% growth in EBITDA to 629 million reais. However, the company recorded a net loss of 186 million reais, a stark contrast to the net income of 114 million reais in the same period last year. Notably, total slaughter and sales volume both saw significant increases during the quarter.
In summary, the regulatory obstacles faced by Minerva and Marfrig highlight the complexities of cross-border deals in the food and beverage industry. It underscores the importance of regulatory compliance and approval procedures in ensuring the successful completion of business transactions.
