Brazil-based meat giant Sadia has revealed that it is mulling a tie-up with local rival Perdigao.

In a statement to the Sao Paulo stock exchange, Sadia said last night (16 March) that the two sides are examining "the feasibility and convergence of interests in some kind of association".

Sadia said it had considered several types of corporate transaction in recent months but declined to give any further details.

The company said a further announcement would be made should a tie-up be formalised.

In November, rumours emerged that Sadia was looking to either sell off some of its assets or seek a strategic partnership to shore-up debt. Sadia refused to comment.

In October, Sadia posted a third-quarter net loss of BRL777.4m (US$342m) due to the impact of foreign exchange derivatives held by the company.

The loss compared to a profit of BRL188.4m in the third quarter of last year but Sadia said it had secured credit of BRL2.3bn to guarantee cash flow and cover liabilities.

The result masked an 8.7% rise in operating profit to BRL189.4m. Sales were up 28.3% to BRL3.15bn.