Company raised antitrust concerns over SALIC’s role in both firms.
Brazil’s antitrust watchdog CADE has accepted a request from beef producer Minerva to participate as a third party in the review of the proposed merger between meatpackers Marfrig and BRF. Minerva raised competitive concerns and pointed to potential conflicts involving its shareholder, the Saudi Agricultural and Livestock Investment Company (SALIC), which also holds stakes in both BRF and Marfrig.
The antitrust regulator had said last week the transaction would be approved, provided no appeals were filed within 15 days.
From now on, the merger review will move into a more in-depth phase. According to Mr. Macedo, Minerva “has satisfactorily demonstrated to be an economic agent directly affected by the merger.”
Minerva competes directly with Marfrig in the fresh beef segment and also supplies meat to BRF. In its petition, the company highlighted the competitive risks stemming from the merger—particularly the possibility of unilateral or coordinated effects due to SALIC’s simultaneous shareholding positions in both Minerva and Marfrig, which could reduce rivalry and enable inappropriate strategic alignment among competitors.
Mr. Macedo noted that the case also calls for a more detailed analysis of the processed meat market and the potential impact of increased buyer power in the food service segment.
“The parties are hereby granted a 15-day period, counted from the publication of this decision, to submit any administrative appeals to the CADE’s tribunal,”
Mr. Macedo added in the order.
According to sources familiar with the case, BRF and Marfrig are not overly concerned about the objection. The CADE has already reviewed Marfrig’s increasing ownership in BRF on two prior occasions, including during the current merger discussions, one source familiar with the matter told Valor.
According to last week’s opinion by the CADE’s general superintendence, Marfrig already owns 50.49% of BRF’s shares, meaning the merger would not constitute a transfer of control.
Many details of the ruling remain confidential, including product-level information such as volumes of hamburgers, kibbeh, and meatballs sold by the two companies. Access to these restricted data points is one of the reasons Minerva is seeking third-party status in the case.
The Marfrig-BRF merger was announced on May 15 and will result in the creation of MBRF Global Foods Company. The combined firm will have annual revenue of R$152 billion, operations in 117 countries, and annual production of around 8 million tonnes, making it one of the largest food companies in the world.
Source: Valor International
