Brasil Foods to acquire 49% stake in Federal Foods

Brazilian food company Brasil Foods (BRF) has signed a binding agreement through its Austrian subsidiary to acquire a 49% stake and management control of Federal Foods, a privately-held company based in Abu Dhabi, UAE, for $36m.

The remaining stake in the Abu Dhabi firm will be held by its current owners Al Nowais Investments.

The acquisition will be part of BRF’s strategy to expand its reach in order to access local markets, strengthen its brands and boost its product portfolio in the Middle East region.

Over the last two decades, Federal Foods has been a UAE distributor of Sadia products, a BRF food brand.

Besides Sadia-branded products, it also distributes a wide range of chilled, frozen and dry products from other brands and suppliers.

Currently, BRF products represent 65% of Federal Foods’ total net sales and, following this transaction, BRF intends to continue its partnership with the company and its suppliers.

Federal Foods, which was set up in 1991, caters to a wide range of clients from the retail, foodservice and wholesale segments.

The company operates through six locations in the UAE and one branch in Qatar.

It employs more than 1,300 employees and operates a logistics fleet of over 260 chilled/frozen vans.

In fiscal 2011, the firm distributed about 92,000t of products and its net sales reached $266m.

Following the acquisition of the stake, BRF will continue to sell and distribute its portfolio of products under the Sadia and Perdix brands in the UAE through Federal Foods.

The transaction, which will depend on the completion of legal and accounting due diligence, is expected to be closed in the next few months.