Brazil's Marfrig Gets Another Chunk of National Beef

Jan. 29, 2020
Jefferies Financial sells its remaining 31% holdings for approximately $970 million in cash.

Jefferies Financial Group Inc., a New York financial services company, at the end of last year sold its remaining 31% holdings in National Beef Packing Co. to Brazil's Marfrig Global Foods for approximately $970 million in cash.

That transaction follows Jefferies' original sale to Marfrig of a 48% interest in National Beef in June 2018. The seller at the time was identified as Leucadia National Corp., a predecessor of Jefferies.

That gives Marfrig most, but not all, of National Beef. US Premium Beef, an association of American producers, still holds 15 percent and other shareholders have the remainder.

Leucadia invested $868 million to acquire 79% of National Beef eight years ago. "We persevered during National Beef’s severe downturn and were rewarded with strong cash distributions from operations, and now the sale of our remaining interest," said Jefferies CEO Rich Handler. "We will have realized an aggregate of almost $3 billion in cash, or 3.3 times our original investment in National Beef."

The transaction doubles Marfrig's sales and makes the Brazilian company the second largest beef processor in the world – after JBS, another Brazilian company with extensive North American sales. National Beef, headquartered in Kansas City, Mo., itself is the fourth largest beef processor in the world, with sales of $7.3 billion. Marfrig controls $13 billion in worldwide beef sales.

National Beef itself last year bought Iowa Premium LLC, a company based in Tama, Iowa, that specializes in Black Angus beef.

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