Marfrig aquires National Beef

Marfrig aquires National Beef

Brazil’s Marfrig Global Foods announced early Monday it has reached an agreement to purchase 51% of National Beef Packing Co. for 969 million USD. The acquisition would make Marfrig the world’s second-largest beef processor, with consolidated sales of 13 billion USD. The acquisition would boost Marfrig’s total slaughter capacity to 8.3 million per year with the combined operations and provide access to the Japanese and South Korean markets, which are currently closed to Brazilian beef.

The deal helped propel Marfrig shares as much as 19 percent higher on Monday. Analysts said the resulting company would be less indebted and better positioned to profit in the global market for beef products. However, U.S. agriculture anti-trust group the Organization for Competitive Markets lamented the increasing involvement of non-U.S. companies in the country’s beef trade.

For U.S. Premium Beef, which owns 15% of National Beef Packing Co., it’s “business as usual,” according to Tracy Thomas, vice president of marketing. Leucadia National Corporation will transfer National Beef’s control to Marfrig, but will remain as a minority shareholder with 31%. USPB will maintain its 15% stake and other shareholders control the remaining 3%.  

Marfrig said National Beef will remain under the current management of CEO and Chairman Tim Klein. “I am excited to welcome the Marfrig group as a partner in National Beef,” Klein said in a statement. “Their broad global food platform will further strengthen our efforts to build our brand in new and existing markets as the demand for high quality U.S. beef grows. This transaction will be transparent to our valued employees, suppliers and customers.”

Marfrig’s Chief Executive Martin Secco told a news conference in Sao Paulo that he hopes the U.S. will lift the ban by the middle of this year. Currently Marfrig supplies the U.S. market with fresh beef it produces in Uruguay, he said.