June 12, 2013

      
JBS to acquire Seara Brasil pork, Marfrig's poultry unit

JBS SA is to acquire the Seara Brasil pork and poultry unit of Marfrig for BRL5.85 billion (US$2.76 billion).

No cash or shares will change hands, as the purchase price consists entirely of assumed debt.

JBS will also get Zemba, Marfrig's leather operation in Uruguay.

The sale, which requires regulatory approval, is aimed at "re-balancing Marfrig's capital structure" and concentrating the company's efforts on its Brazilian beef business, according to the announcement.

"The deal puts the company in its best debt position in recent years," Seara Brasil President Sergio Rial, who is set to become Marfrig's CEO next year, said at a press conference in Sao Paulo.

Marfrig's stock price has suffered amid investors' concerns about the firm's US$6.1 billion debt.

"This turns us into the no. 2 processed foods company in Brazil and is going to make us a global leader in poultry," JBS' CEO, Wesley Batista, said at the same news conference.