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Two major Brazilian corporations exchange assets in Argentina and Uruguay

Friday, December 9th 2011 - 06:56 UTC
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Brazil Foods is the world’s largest poultry producer Brazil Foods is the world’s largest poultry producer

Brasil Foods SA, the world’s largest poultry exporter, said it signed an asset-swap accord with Marfrig Alimentos SA after being ordered to shed some units as part of a regulatory approval for a 3.8 billion dollars takeover.

Marfrig, Latin America’s second-largest beef producer, will take control of the assets that Brazil’s antitrust regulator told Brasil Foods to sell in July, the companies said in regulatory filings. Marfrig will transfer its Argentine assets, commercial operations in Uruguay and Chile and a feedlot in Brazil’s Mato Grosso state, as well as paying 200 million Reais (112 million dollars) to Brasil Foods for the assets, they said.

“Marfrig is quite indebted so this may have been the best way for them,” to acquire the assets, Caue Pinheiro, an analyst at Sao Paulo-based brokerage SLW Corretora, said in a telephone interview. “Brasil Foods had to sell.”

Brasil Foods was ordered by the regulator, known as Cade, to sell units as part of its takeover of rival Sadia SA. The assets, which included 12 brands, 10 processing plants, eight distribution centers and four slaughterhouses, were worth about 1.4 billion Reais.

Marfrig rose 8 centavos, or 1%, to 8.31 Reais in Sao Paulo trading, after jumping earlier as much as 4.6%. Brasil Foods fell 2.9% to 36.75 Reais.

The assets exchanged by Brasil Foods and Marfrig have “equivalent value,” the companies said in the regulatory filings. The deal will still have to be approved by Cade as part of proceedings related to the takeover of Sadia, they said.

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