CADE Approves M&A Between Minerva and Marfrig Unanimously

Minerva has just received approval from CADE (Brazilian Administrative Council for Economic Defense) to acquire a set of slaughterhouses from Marfrig. The transaction was approved by all CADE council members (6 to 0). Announced on August 28 last year, the BRL 7.5 billion deal between Minerva and Marfrig is the second-largest M&A in the history of the Brazilian meatpacking industry, second only to JBS’s acquisition of Bertin in 2009.

The acquisition will transform Minerva into a dominant player in South America, holding 30% of the market share in beef exports from the region. Since the acquisition was announced over a year ago, the proceedings in CADE have been a point of concern for investors and took longer than the company had hoped. To secure CADE’s approval, Minerva agreed to sell a facility in Pirenópolis (GO). This plant was once a Marfrig slaughterhouse but has been inactive since 2010 and currently lacks equipment.

In practical terms, Minerva will have to sell a real estate asset. CADE imposed the condition to sell the Pirenópolis facility due to concerns about excessive concentration in cattle slaughtering in Goiás.

Marfrig will not be allowed to acquire slaughterhouses in the states where it sold units, but the antitrust body left the door open for Marfrig to enter other regions, relaxing requirements that were part of the contract with Minerva. Additionally, Marfrig is authorized to expand the capacity of the industrial complexes in Várzea Grande (MT) and Promissão (SP). In August, CADE’s technical body had already lifted the restriction on expanding capacity in states where Marfrig had no assets up for sale, such as the São Paulo plant. The companies may also maintain their beef supply contract with each other.

From now on, the case needs to pass through final adjudication, which should take a few days. After that, Marfrig will have 19 days to transfer the slaughterhouses to Minerva. It is highly likely that the company, led by the Vilela de Queiroz family, will assume control of the assets in October, as CFO Edison Ticle projected in his last interview with The AgriBiz.

Translated from: The AgriBiz.