Nestlé has not made an offer for BRF’s pet-food business, the Swiss giant has insisted.
The world’s largest food maker – and the owner of the Purina pet food brand – was reported to have lodged a bid for the assets.
Bloomberg said yesterday (28 March), quoting unnamed sources, that Nestlé had tabled 1.7bn reais ($330.1m).
However, the Swiss giant has distanced itself from the claims.
“Nestlé informs that it didn’t place the offer for the BRF’s pet-food assets,” the company’s Brazil unit told Just Food.
At the time of writing, the business had not responded to a question of whether it will bid for the assets.
In February, BRF, which is predominately engaged in the supply of meat, said it was in early-stage discussions with would-be buyers for its pet-food arm. The company confirmed in a stock-exchange filing on 28 February it had hired Banco Santander as a financial advisor for a potential sale.
It remains unclear exactly what pet-food assets BRF has put up for sale. In 2021, the company acquired two local players in the category, Mogiana Alimentos and Hercosul.
BRF noted in its 2021 annual report that the company became “one of the three-biggest players” in Brazil’s pet-food market with a 10% share following the two acquisitions. Other areas of the business include pork, poultry, meat substitutes and ready meals.
“Focusing on the company’s 2030 vision, we are strengthening our processes relating to products with greater aggregated value, including the expansion of pet foods,” BRF said in the report. “In the pet segment, we aim to achieve leadership in the Brazilian market within the next five years.”
As well as Purina, Nestlé owns pet-food assets including UK business Lily’s Kitchen.
Nestlé and fellow packaged-food major Mars are among the most prominent global suppliers of branded pet food and have expanded their presence through M&A. The category enjoyed a boost during the pandemic as people sought companionship in a pet during lockdowns, while so-called humanisation is also driving growth during the cost-of-living squeeze.
Brazilian meat peer Marfrig Global Foods is the largest individual shareholder in BRF with around a 33% stake. Marfrig chairman Marcos Molina took on the same role at BRF in March 2022. And in the summer of that year, Marfrig’s CEO Miguel Gularte was named chief executive of BRF, which generated revenue in fiscal 2021 of BRL48.3bn.
In its initial reporting in February, Bloomberg suggested BRF was seeking to reduce debt leverage by selling its pet-food assets to focus on other parts of the business and also linked the plan to Marfrig building up its stake.