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Brazil’s Marfrig to buy 51% stake in National Beef for $969m

FBR Staff Writer Published 10 April 2018

Brazilian meat company Marfrig Global Foods has agreed to acquire a stake of 51% in US beef processor National Beef Packing for $969m.

The Brazilian firm expects that the transaction will help it become the second-largest beef processor in the world with consolidated sales of R$43bn ($13bn).

The deal is anticipated to improve Marfrig’s leverage ratio while helping the Brazilian meat company get access to markets like Japan and South Korea.

Kansas-based National Beef Packing is considered to be the fourth-largest beef processor in the US. It exports its products to 40 countries, including Japan, which presently has an embargo on beef exports from Brazil.

Marfrig CEO Martín Secco said: “The acquisition of National Beef represents the realization of a unique opportunity.

“With the transaction, we will have operations in the world’s two largest beef markets, will gain access to extremely sophisticated consumer countries and will be able to grow while maintaining rigorous financial discipline.”

National Beef has two slaughterhouses in Kansas and has a slaughtering capacity of 12,000 heads of cattle per day. The beef processor, whose 2017 sales were $7.3bn, has been controlled by Leucadia National since 2011, which currently owns a stake of 79%. 

After completion of the transaction, Leucadia will transfer control to Marfrig and will keep a stake of 31% while the US Premium Beef will own 15% and other shareholders will keep the remaining stake of 3% in National Beef.

National Beef president and CEO Tim Klein said: “I am excited to welcome the Marfrig group as a partner in National Beef. Their broad global food platform will further strengthen our efforts to build our brand in new and existing markets as the demand for high quality U.S. beef grows.

“This transaction will be transparent to our valued employees, suppliers and customers.”

Subject to certain conditions and receipt of customary regulatory approvals, the transaction is likely to be completed in the second quarter of this year.

Image: Raw Angus Beef slices on a black stone table. Photo: courtesy of Denis Karpenkov/FreeDigitalPhotos.net.