Brazilian beef processor Minerva is in talks with international investors about a capital injection in poultry processor BRF, the owner of the Sadia and Perdigão brands.
The value of the investment – which would help BRF deleverage quickly – would be between US$ 2.5 billion and US$ 3 billion, and it would be done simultaneously with a merger of Minerva and BRF.
Depending on the valuation the Minerva consortium will be willing to pay, the transaction could give the group up to a 30% stake in BRF, which is trying to emerge from a crisis that sent its stock tumbling over the past year.
The investors Minerva is courting include Arlon, an investment fund with ties to Continental Grain, one of the largest agribusiness companies in the US; a Chinese investor with a presence in Brazil; and financial investors from the US and Asia.
However, international investors have signaled they want Minerva to find other local partners for the venture, as a way to strengthen BRF’s management team given the magnitude of the work required to turn around the company. One of the possible local partners would be Cosan’s controlling shareholder, Rubens Ometto, who has yet to be convinced of the merits of the transaction.
Minerva has engaged Marco Gonçalves, the former BTG Pactual head of M&A and now a principal at Riza Capital.
Before the crisis that imploded BRF, Marfrig, the second largest protein company in Brazil, has tried to acquire a significant stake in BRF.
Minerva stock rallied 4.5% Tuesday following this news, and BRF shares ended the day up 0.7%.