Brasil Foods to divest assets to Marfrig Alimentos

Brazilian food company Brasil Foods is set to divest ‘a good part’ of its assets to beef producer Marfrig Alimentos to comply with conditions by Brazilian antitrust regulator Cade for its $3.8bn takeover of Sadia SA.

In July, Cade cleared the merger only after stipulating that Brasil Foods would have to divest some portion of its assets.

The regulator feared that Brasil Foods, which was formed after a merger of Sadia with Perdigao in 2009, would have a major market share and wipe out domestic competition with the takeover.

According to the conditions imposed, Brasil Foods was ordered to suspend the use of its leading brand Perdigao for three to five years and also sell 12 other brands, eight distribution centres, four pork and chicken slaughterhouses, and ten food-processing plants.

Brasil Foods said that the suspension and divestitures is expected to affect 12% of its sales volumes and 13% of its operating revenue.

Brasil Foods has consulted Banco BTG Pactual to facilitate the sale of the assets to Marfrig.