JBS S.A. and Marfrig Alimentos S.A. have reported an agreement in which JBS will acquire the Seara Brasil business of Marfrig, which includes chicken, pork and meat processing.
The acquisition also includes Marfrig's Zenda leather business in Uruguay, according to the announcement.
The deal, which will be done in the form of a JBS assumption of Marfrig debt, is valued at 5.85 billion reals ($2.75 billion).
JBS and Marfrig are both headquartered in Sao Paulo, Brazil.
By deleveraging, Marfrig said it will be able to rebalance its capital structure, concentrate on its Brazilian beef business, redirect its foodservice strategy and speed up growth of its export platform. Marfrig will be a much smaller company, as Seara accounted for 30% of total Marfrig revenues.
JBS said it will add brands and expand its meat processing business.
Seara is a major chicken, pork and packaged meats brand in Brazil, and Marfrig acquired the company from Cargill Inc. three years ago (Feedstuffs, Jan. 16, 2010).
The acquisition has been approved by the boards of directors of the two companies and remains subject to approval by JBS shareholders and regulatory review, the announcement said.