The Brazilian conglomerate Minerva Foods is moving to complete a further overseas acquisition, this time a state of the art abattoir and meat packing plant in Uruguay which once the deal is completed will mean over 50% of the country's meat industry will be under control of Brazilian conglomerates.
Minerva Foods signed an exclusivity agreement with the Japanese NH Foods to negotiate the purchase of Breeders & Packers Uruguay (BPU), an Uruguayan slaughterhouse with a slaughtering capacity of 1,000 head of cattle per day. The deal is expected to be completed by December 15, when the exclusivity period expires.
Although no figures or related conditions have been revealed, industry sources in Uruguay and Brazil estimate the deal to be between US$ 35 million and US$ 45 million. Minerva’s purchase has Rabobank as financial advisor..
NH Foods decided to sell the business at a time of downturn in the livestock cycle in Uruguay. Five years ago, the Japanese paid some US$ 135 million for the BPU, which belonged to a British company.
Once the purchase is completed, Minerva will expand its slaughtering capacity in Uruguay by 40%. Currently the company has three plants in Uruguay, with a combined capacity to slaughter 2,500 cattle per day. The other large Brazilian protein conglomerate Marfrig, still remains leader in meat production in Uruguay, which means Brazilian companies dominate the country's industry.
By taking over the BPU, Minerva is betting on the up turn of the cattle cycle in Uruguay, hoping for a greater supply of cattle in the coming years. In the most recent videoconference with analysts, the company had already signaled its belief in an upcoming improvement situation.
The rapprochement of Minerva with NH Foods in Uruguay could develop into a global partnership, possibly involving the Japanese business branch in Australia. Nippon Ham owns the third-largest cattle slaughterhouse in Australia. This month also Minerva shipped to NH Foods a first batch of 300 tons of tongues, after Japanese authorities opened the market for such bovine by products from Uruguay.