Brazilian meat giants Minerva Foods and Marfrig have confirmed that Uruguay’s competition regulator has blocked part of a 7.5bn reais ($1.5bn) deal between them.
La Comisión de Promoción y Defensa de la Competencia (Coprodec), Uruguay’s competition watchdog, has blocked the sale of three plants owned by Marfrig to Minerva, which would have amounted to 675m reais.
Both Minerva and Marfrig denied receiving any communication from Coprodec last week but they revealed the update in statements yesterday (21 May).
In Minerva’s statement, the company said “the decision does not affect the acquisition” of the other plants included in the deal, which are based in Brazil, Argentina and Chile. However, it caveated that Conselho Administrativo de Defesa Econômica (CADE), Brazil’s anti-trust authority, still needs to approve the deal.
The group said: “The company highlights that it is evaluating the terms of Coprodec’s decision, which is not final and remains subject to appeal both administratively and judicially, which should be finalised in the coming days.”
The remainder of the deal includes 11 beef plants and a distribution centre in Brazil, one “industrial unit in Argentina and a lamb plant in Chile.
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By GlobalData
When the purchase was agreed, it was reported the deal will expand Minerva’s cattle slaughtering and deboning capacity by 44% to 42,439 head a day.
The net revenue from the plants would take Minerva’s annual net revenue above 50bn reais, it added at the time. In 2022, Minerva’s net revenue stood at 31bn reais, which the business said was a record for the group.
In the opening quarter of its fiscal 2024, net revenue jumped 12.6% to 7.19bn reais while EBITDA also grew 18.2% to 629m reais. However, the group returned a net loss of 186m reais, compared to net income of 114m reais in the opening quarter of 2023.
In the quarter, total slaughter was up 23.2% to 1.03 million head, while total sales volume grew by 20.1% to 346,100 metric tonnes.
