Brasil Foods to swap assets with Marfrig

Brasil Foods has signed agreement to exchange assets with beef producer Marfrig Alimentos in Argentina and Brazil.

The move comes after antitrust regulator Cade ordered Brasil Foods to divest some of its businesses in the country for its takeover of Sadia.

Under the agreement, Marfrig will gain ownership of assets worth R$1.4bn (US$775m), which include 12 brands, eight distribution centres, four pig and chicken slaughterhouses, and ten food-processing plants.

In exchange, Brasil Foods will gain control over Marfrig’s commercial operations in Uruguay and Chile, Argentine assets, a feedlot in Brazil’s Mato Grosso state, and receive a payment of R$200m (US$112m) from Marfrig.

The companies said in regulatory filings that the assets swapped have equivalent value; however, this transaction still needs clearance from Cade as a part of proceedings associated with the Sadia takeover.

In July, Cade ordered Brasil Foods, which was formed after a merger of Sadia with Perdigao in 2009, to divest some portion of its assets ensure domestic competition following the takeover.

In addition, Brasil Foods was also required to suspend the use of Perdigao brand for frozen food items for up to five years and some processed pork products for three years.

The company has claimed that the suspension and divestitures is expected to hit 12% of its sales volumes and 13% of its operating revenue.

Brasil Foods manufactures frozen chickens, frozen pork cuts and beef cuts, processed food products, milk, soy meal and refined soy flour.

Marfrig Alimentos, based in Sao Paulo, Brazil, is involved in the production and distribution of fresh, processed and prepared beef, pork, mutton, poultry and food products.