Brazilian meat major Marfrig’s sale of processing assets to local peer Minerva has now been fully approved by the country’s competition regulator.
In its ruling, however, the Brazilian Administrative Council for Economic Defense (CADE) said Minerva must sell a plant, a condition for the deal for part of Marfrig's beef and lamb business to go through.
The transaction, valued at 7.5bn reais ($1.3bn when announced in 2023), was granted conditional approval by CADE last month.
Minerva is to purchase 11 Marfrig cattle slaughter and deboning units in Brazil in the states of Rio Grande do Sul, Mato Grosso, Mato Grosso do Sul, Pará, Goiás, Rondônia and São Paulo, in addition to one unit in Argentina and another in Chile.
Plans to include Uruguayan assets in the deal were blocked by the country’s anti-trust regulator in May.
CADE had highlighted two competition concerns: the elimination of the expansion limit for the industrial plant in Várzea Grande, in Mato Grosso, and the sale of the plant in Pirenópolis, in Goiás.
It has now decided that, for the deal to proceed, Marfrig will be able to increase its slaughter and deboning capacity at the Várzea Grande plant but Minerva will have to sell the Pirenópolis facility, formerly owned by Marfrig.
Marfrig and Minerva noted the approval decision in separate stock-exchange announcements. Marfrig said it expects the closing of the plant and the completion of the transaction will both occur before the end of next month.
CADE said in its statement that the measures it announced for the deal to conclude are “the most appropriate and proportional alternative to ensure the preservation of a balanced competitive environment, being sufficient to mitigate the risks associated with market concentration and prevent the formation of dominant positions, since the cattle slaughter and deboning market was among the concerns raised by the rapporteur [enquiry inspector]".
Marfrig is also the largest shareholder in Brazil-based poultry group BRF, which controls US beef producer National Beef.
