Majority approval among independents could greenlight deal even without controlling shareholder’s support.
Meatpacker Marfrig may secure shareholder approval for its merger with BRF without needing to rely on its controlling stake, based on preliminary remote voting results. The majority of BRF’s minority shareholders have already cast their votes remotely, and most are in favor of the deal.
According to BRF’s remote voting bulletin, 382.15 million shares were accounted for. Of those, 48% abstained, 35.41% voted in favor, and 16% opposed the merger. Among the 196.59 million valid votes, 68.9% were in favor, representing a 74.06 million-share advantage for approval among minority shareholders participating in remote voting.
The remote votes represent 24% of BRF’s outstanding shares, excluding treasury stock. Factoring out Marfrig’s controlling stake as well, the remote ballots already account for 51.5% of the company’s free float.
However, some investors who have publicly raised concerns about the deal, or whose positions remain undecided, have held back their votes for the in-person meeting scheduled for Wednesday (18). One such investor is Previ, the retirement fund for Banco do Brasil employees. Although initially inclined to support the deal, Previ is now internally debating a change in stance. In recent days, the fund trimmed its stake in BRF from 6.14% to around 4%, but still holds voting rights over roughly 67 million shares.
According to Valor’s business news website Pipeline, Previ representatives met with Marfrig on Friday (13) and are continuing to clarify aspects of the proposed merger. It is not unusual for Previ to reserve its vote for the day of the meeting. It has done so in the past six shareholder assemblies, regardless of the subject. The fund declined to comment for this article.
Asset manager Latache also voiced opposition, filing a formal objection with Brazil’s securities regulator (CVM), raising concerns about governance procedures and the role of controlling shareholder Marcos Molina in the voting process. Latache reportedly holds about 40,000 shares, purchased after the deal was announced. Another investor, Alex Fontana, who owns 0.11% of BRF’s shares, filed a similar complaint with the CVM.
Marfrig and BRF sources say these objections come from investors with minimal shareholding and limited influence on the outcome. Meanwhile, other prominent shareholders—including Saudi Arabia’s Salic and longtime BRF investor Luiz Fernando Furlan—have expressed support for the deal.
None of the dissenting voices have challenged the strategic merits of the merger, which would create a R$150 billion revenue powerhouse. The companies estimate recurring operating synergies of R$805 million and tax synergies with a present value of R$3 billion.
From a governance perspective, both firms have emphasized the procedural safeguards in place. BRF relied on a fairness opinion from Citi, which informed the assessment of an independent committee composed of members appointed before Marfrig entered into BRF’s capital. While some critics have questioned the true independence of the committee formed by Marfrig, the company argues that it was not legally required to establish a committee but chose to do so for transparency.
Under Brazil’s regulatory framework, specifically CVM Opinion No. 35, Mr. Molina is permitted to vote in the shareholder meeting—a point of contention for some investors. Critics compare it to the J&F Group’s abstention during JBS’s stock exchange migration vote, although in that case, CVM guidance did not support participation. Mr. Molina has yet to say whether he will cast his vote, either to align with the minority decision or to influence the outcome. With his stake, the deal is technically already approved, although the companies are aiming to secure majority support from minority shareholders.
Meanwhile, competitor Minerva has raised antitrust concerns and filed as an interested third party with Brazil’s antitrust watchdog, CADE, in an attempt to escalate the matter to the agency’s tribunal. However, the merger has already been cleared without restrictions by CADE’s General Superintendence.
Source: Valor International
