MercoPress. South Atlantic News Agency

Brazil's Marfrig becoming world's main meat processor

Brazilian meat processor Marfrig said on Monday it will pay 680 million US dollars for assets in Brazil and Europe owned by US based OSI Group, the largest meat provider for McDonald's fast-food chains.

Brazil's meatpacking sector has been consolidating and with the strengthening of the Real against the US dollar in the past year, Brazilian companies with strong cash flows have been buying up assets abroad. In March, Brazilian meat company JBS bought US rivals Smithfield Beef Group and National Beef Packing Co for almost 1.3 billion US dollars. The recent acquisitions pushed the company's US unit JBS-Swift beyond Tyson Foods Inc to become the largest US beef producer. Marfrig said in a statement sent to Brazilian market regulator CVM on Monday that it would pay 400 million in cash and 280 million in shares. Another 220 million could be paid out based on the performance of the European assets. The OSI acquisitions should represent an additional nearly 2 billion US dollars in annual sales for Marfrig, the companies said in a joint statement. Marfrig is further expanding into pork and poultry with its acquisition of Braslo Produtos de Carnes, Penasul Alimentos, and Agrofrango Industria e Comercio de Alimentos in Brazil from OSI. It will also take over OSI's Moy Park group in Britain, Northern Ireland, France and the Netherlands, as well as Kitchen Range Foods in Britain and Albert Van Zoonen BV with activities in the Netherlands, the company said. David McDonald, president of the Aurora, Illinois-based OSI, will get a seat on the administrative board of Marfrig, the companies said, adding that the deal was expected to be finalized later in 2008. Margrif also has interests in Argentina, Uruguay and Paraguay. Brazil is the world's largest beef and poultry exporter.