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Uruguayan Antitrust Scrutiny Puts Major Meatpacking Deal Between Marfrig and Minerva on Hold

 |  May 19, 2024

Brazilian meatpacker Marfrig announced on Friday that it has not received any official notification regarding media reports that Uruguay’s antitrust authorities have blocked its deal to sell several plants to rival Minerva. Minerva echoed this statement, clarifying that no formal decision has been communicated by the Uruguayan authorities.

The proposed transaction, which was agreed upon in August, involves Marfrig selling 16 slaughtering plants to Minerva for 7.5 billion reais ($1.47 billion). This significant deal is set to reshape the meatpacking landscape in South America. The sale includes plants in Uruguay, Brazil, Argentina, and Chile, with a specific division of assets: 1.5 billion reais for the Uruguayan plants and 6 billion reais for those in the other countries, according to analysts from Santander.

Uruguay’s economy ministry, speaking to Reuters on Friday, stated that the country’s antitrust authority has yet to make an official decision and is not providing any comments at this time.

Santander analysts have noted that even if the Uruguayan segment of the deal is not approved, they do not foresee this affecting similar transactions in Argentina, Brazil, and Chile. However, they also mentioned that the entire transaction’s completion hinges on approval from Brazilian authorities.

The plants up for sale primarily process cattle, with one facility in Chile specializing in lamb. Should the deal proceed as planned, Marfrig will retain its larger-scale industrial facilities in South America, shifting its focus to the production of processed meat products. Meanwhile, Minerva will continue to concentrate on beef production.

Goldman Sachs highlighted that three of the 16 plants Minerva aims to acquire are located in Uruguay, representing 16% of the total beef slaughtering capacity targeted in the transaction.

Source: Reuters