By Brazil Stock Guide – Brazil’s antitrust regulator, Cade, delayed its ruling on the merger between Marfrig Global Foods SA (MRFG3) and BRF SA (BRFS3), even though a majority of board members voted on Wednesday to approve the transaction without restrictions. The development was first reported by Reuters.
The deal, announced in May, calls for Marfrig to acquire all shares of BRF, owner of iconic food brands Sadia and Perdigão. The combined company, to be named MBRF, would become a powerhouse in the poultry, pork, and beef industries, with estimated annual revenue of 152 billion reais ($29 billion).
The ruling was suspended after board member Carlos Jacques Vieira Gomes requested additional time to review the case. Cade said the process will return for judgment within 60 days.
Competition concerns and Saudi stake
Cade’s rapporteur and chairman Gustavo Augusto de Lima cast the first vote for approval without conditions, supported by most of the board. If confirmed, the merger would intensify competition with JBS SA (JBSS3), the world’s largest meat processor, which also operates across poultry, pork, and beef globally.
The board also discussed the role of Saudi Agricultural and Livestock Investment Co. (Salic), a state-owned investment firm that holds an 11.03% stake in BRF and 24.49% in Minerva SA (BEEF3), a Marfrig competitor. Counselors argued that Salic’s potential political influence in the merged company should be assessed later, should the Saudi group take part in the new entity through share exchanges.
Board member Victor Oliveira Fernandes said during the session: “If Salic is to join MBRF through the share swap, the company itself said it will notify the operation. If this changes, it will require a new notification to Cade.”
Rapporteur Gustavo Augusto added: “The solution is simple: approve the transaction and declare that Salic’s political rights cannot be exercised until the tribunal rules on the matter.”
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