Despite the end to talks about a possible merger between Brazil-based meat companies BRF and Marfrig Global Foods, BRF is still interested in seeking possible mergers or strategic partnerships that would give it a meaningful presence in the beef industry.
BRF and Marfrig in May revealed that the two companies had signed a memorandum of understanding to discuss the possibility of a business merger. However, as of July 11, Marfrig and BRF had posted notices on their respective investor relations webpages that those talks had ended, citing the management of the two companies could not come to an agreement as to how a combined entity would be governed.
Had a merger been approved a world leader in the protein market would have been created with a wide geographical reach and diverse product offerings in the poultry, beef and pork markets.
Marfrig Global Foods in November 2018 finalized the sale of its Keystone Foods subsidiary to Tyson Foods, citing a desire to put more focus on its beef industry. With its 2018 acquisition of the majority stake in U.S.-based National Beef Packing Company, Marfrig became the world’s second largest beef processor in terms of production capacity.
Keystone Foods at the time was the tenth largest poultry company in the United States.
And a stronger presence in the beef industry is something BRF wants. The company is more known for its chicken and pork production. According to the WATTAgNet Top Poultry Companies Database, BRF is the world’s third largest broiler company.
BRF CEO Lorival Luz told Bloomberg it is interested in non-case mergers, strategic partnerships or long-term supply agreements that would give it further access to beef supplies, which would give its foodservice and processed foods businesses a lift. However, Luz added that no specific business deals concerning beef are being presently discussed.
“Bovines are on the map. The question is how, when,” Luz said.
