It was announced this morning that Brazil’s Marfrig Global Foods has reached an agreement to acquire 51 percent of National Beef Packing Company for $969 million, thus making them the world’s second largest beef processor.
According to a story from meat industry publication Meatingplace, Marfrig CEO Martín Secco said “With the transaction, we will have operations in the two largest beef markets in the world, we will reach extremely sophisticated consumer countries and we can grow by maintaining strict financial discipline.”
The company’s slaughter capacity will total 8.3 million cattle per year with the combined operations. Marfrig will also have access to the Japanese and South Korean markets, which are currently closed to Brazilian beef.
Leucadia National Corporation will transfer National Beef’s control to Marfrig but will remain as a minority shareholder of the company, with a 31 percent stake. US Premium Beef will hold 15 percent and other shareholders will hold the remaining 3 percent. The minority shareholders have committed to maintain their shares in National Beef for a minimum of five years.
National Beef will remain under the management of current CEO and Chairman Tim Klein. Marfrig will nominate five members to the company’s board, Leucadia will choose two and the other shareholders will define two more members.
The acquisition of National Beef is 100 percent financed by Rabobank.
In addition, Marfrig intends now to sell 100 percent of Keystone. Secco said Marfrig plans to complete the acquisition of National Beef and the sale of Keystone in the first half of this year.