Marfrig Global Foods SA, Brazil's second largest food company after JBS, will become the second largest beef processor in the world – also after JBS – when it buys 51 percent of the shares of National Beef Packing Co. for $969 million.
The transaction, which doubles Marfrig's sales, values National Beef at $2.3 billion, including debt.
Marfrig on April 9 announced the agreement to acquire 48 percent of National Beef from Leucadia National Corp., an investment firm, and 3 percent from other shareholders. After the deal, Leucadia will continue to own 31 percent of National Beef and US Premium Beef, an association of American producers, will hold 15 percent; other shareholders will have the remaining 3 percent.
National Beef, headquartered in Kansas City, Mo., is the fourth largest beef processor in the world, with sales of $7.3 billion. After the purchase, Marfrig will control $13 billion in worldwide beef sales.
"With the transaction, we will have operations in the two largest beef markets in the world," says Martín Secco, CEO of Marfrig. "We will reach extremely sophisticated consumer countries and we can grow while maintaining strict financial discipline."
Meanwhile, Marfrig plans to reduce its debt by selling Keystone Foods, one of the world's biggest food suppliers to fast food and other foodservice outlets.
Tim Klein, National Beef's CEO and president, is expected to remain with the company, along with other key executives.