Brazilian company signed an exclusivity agreement with Japan’s NH Foods
11/22/2022
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NH Foods had paid nearly $135 million for BPU five years ago — Foto: Divulgação
Minerva Foods is close to buying another facility abroad. The Brazilian company signed an exclusivity agreement with Japan’s NH Foods to discuss the acquisition of Breeders & Packers Uruguay (BPU), an Uruguayan slaughterhouse with the capacity to process nearly 1,000 animals per day.
Sources say Minerva is in the due diligence stage. The deal is expected to be defined by December 15, when the exclusivity period ends.
Sources say the amounts were not defined yet, but Minerva is expected to disburse $35 million to $45 million. Rabobank is advising Minerva.
NH Foods decided to sell the Uruguayan operation amid the down cycle of the cattle-raising business in the neighboring country. NH Foods had paid nearly $135 million for BPU five years ago.
If it buys the facility, Minerva will expand its processing capacity in the country by 40%. The company currently has three units in Uruguay, with a combined capacity of 2,500 heads of cattle a day. In Uruguay, Marfrig, another Brazilian company, is the leading meat producer.
Minerva’s decision to take over BPU is based on the bet on a turnaround of the cattle-raising market in Uruguay with a larger offer of cattle in the next years. In a recent conference call with analysts, the company cited better perspectives for Uruguay.
The deal with NH Foods in Uruguay may start a global partnership and involve NH’s operations in Australia. Nippon Ham owns the third-largest beef facility in the country.
Minerva is valued at R$8.1 billion on the stock exchange.
*By Luiz Henrique Mendes — São Paulo
Source: Valor International