According to reporting from Reuters, Brazilian food processors BRF SA and Marfrig Global Foods SA announced talks concerning a potential merger on Thursday May 30. If accepted, the tie-up would create one of the world’s largest meat producers.

BRF currently leads the world in chicken exports and Marfrig’s beef business is second to JBS SA globally – a deal would combine both of their portfolios and reach an estimated market cap of $7 billion.

Reuters’ sources state that the companies are expected to reach an all-share deal, with no cash payments. Sources also state that the central aim of the tie-up is to create a protein portfolio that is competitive with global companies like Tyson Foods Inc and JBS.

The companies are reportedly entering a 90-day negotiating period to determine the specific terms of the deal, but initial valuate suggests that BRF shareholders would hold a stake of 85 percent in a combined company, with the rest held by Marfrig shareholders.

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