BRF Brasil Foods SA agreed to exchange assets with competitor Marfrig Alimentos SA to satisfy BRF's agreement with antitrust regulators.
Antitrust regulators must still approve this proposed exchange. Formed from the merger of Brazilian meat processors Perdigao SA and Sadia SA, BRF was required by antitrust regulators in July to sell some of its assets in order to complete the merger of the companies.
As a result, the company had to eliminate or suspend approximately 12% of production capacity to create a rival that could effectively compete with that company.
Part of the deal required the company sell several processing facilities, slaughterhouses and poultry farms, plus eight distribution centers and 12 minor food brands. In addition, the company had to suspend sales of frozen food under the Perdigao brand for up to five years, as well as several processed pork products for three years.
BRF would transfer the distribution centers, one pork processing facility, properties and the rights of any brands it was getting rid of, as well as a 65% stake in Excelsior Alimentos to Marfrig.
Marfrig, in turn, would yield assets from Argentina's Paty brand, plus that brand's commercial operations in Uruguay and Chile, pork yards and rural properties in Brazil's Mato Grosso state, as well as 200 mill. Brazilian reais worth US$111 mill.
Source: BRF Brasil Foods SA, Marfrig Alimentos SA