March 21, 2009


Brazil's Sadia and Perdigao considering merger


Sadia and Perdigao, Brazil's largest meat processors, are considering a merger.


Perdigao said it held talks with Sadia on a possible association but it came to no agreement. Sadia stated it has held partnership discussions with many companies including Perdigao.


With a debt of BRL3.5 billion (US$1.5 billion) and most of it to be due in the third quarter of 2009, Sadia may seek financing from Brazil's national development bank BNDES, which may pressure the company to join with Perdigao, creating one of the leading food companies worldwide, Credit Suisse analyst Marcel Moraes said.


Perdigao would benefit from increasing power to set prices in the global market and cost cuts, said Joao Pedro Brugger at Brazil's Beme Investimentos.


In 2006, Sadia tried to acquire control of Perdigao with a hostile takeover bid that was rejected by Perdigao shareholders.


In 2007, Perdigao overtook Sadia as Brazil's largest food producer after purchasing a Dutch meat processing unit of Cebeco Groep BV and buying 77.3 percent of food company Eleva Alimentos SA.