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Marfrig Acquires Seara from Cargill

by 5m Editor
16 September 2009, at 8:48a.m.

BRAZIL - Brazilian meat processor, Marfrig, is to buy the entire business of Seara Alimentos Ltda - the poultry, pork and processed meat operation, including subsidiaries in Europe and Asia, and the brand, Seara, in Brazil and abroad from Cargill Inc.

The deal includes 12 plants in the processed value-added and processed poultry and pork sectors and a port terminal, with net sales of about US$ 1.7 billion.

The businesses to be acquired by OSI are in:

  • seven poultry plants with a slaughter capacity 1.2 million birds per day and two pig plants with a capacity of 5,800 head/day
  • three manufacturing plants for processed value-added products with the production capacity of 17,500 tonnes/month
  • Private port terminal for refrigerated cargo and dry cargoes at Braskarne in Itajai (SC)
  • the 'Seara' and other brands in this segment
  • distribution operations and marketing offices in the United Kingdom, Japan and Singapore with a share of the export/import from Brazil for several countries
  • nine feed mills
  • six integrated poultry and pork farms with around 3,000 farmers

The businesses in Brazil and abroad will be integrated into other divisions of the OSI Group operation.

Cargill, however, said that the sale does not change its commitment to continued growth in its beef, pork, chicken and egg business in two other regions of the world and it said it will continue to explore opportunities for new investment in the industry globally.

The agreement is initially valued at $706.2 million in cash and $193.8 million in assumption of debt.

The values could be adjusted during the process of due diligence up to the closing of the deal.

Marfrig said that to finance the deal it could raise capital through a stock offering of OSI.

It is expected that the deal will be completed in the fourth quarter of 2009, after its submission to the applicable regulatory agencies in Brazil and abroad and other legal acts required.

The Company believes that there will be significant benefits as a result of the acquisition. OSI will expand its potential in processed foods in Brazil and has now emerged as the second largest player in the domestic market and exporting of poultry and pigs and one of the world's largest, while adding a recognised brand in the processed high value added sector in Brazil and internationally in Seara.