BRF and meat peer Marfrig Global Foods have agreed terms with Halal Products Development Company (HPDC) to broaden a Saudi Arabia joint venture.
Both of the Brazilian meat giants now form MBRF following the approval of a merger agreement in September.
Prior to that combination, BRF had set up a joint venture with HPDC, which is owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.
Under an agreement announced yesterday (27 October), BRF will move its distribution businesses in Kuwait, Oman, Qatar, Saudi Arabia and the UAE into the joint-venture company BRF Arabia Holding.
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Manufacturing plants in Saudi Arabia and the UAE, along with the direct export operations that cater to customers across the wider MENA region, will also be transferred.
MBRF said the transaction is an initial step towards a potential BRF Arabia initial public offering from 2027, subject to market conditions and regulatory requirements.
Upon closing of the transfer, the JV will be renamed Sadia Halal.
Assets in Turkey and production units in Brazil are not part of the transaction.
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By GlobalDataIn its statement, MBRF said: “The expansion of the JV aims to strengthen MBRF’s regional presence, now with the support of HPDC beyond Saudi Arabia.
“This ensures the solidity of the companies’ operations, opens possibilities for further expansion in the region, broadens the production base, and brings us closer to our consumers.”
The assets to be contributed have an enterprise value of $2.07bn and generated $2.1bn in net sales in the 12 months to June.
They account for 7.3% of Marfrig/BRF’s consolidated revenue and around $230m in EBITDA, implying a multiple of about 9x, MBRF said.
On closing, MBRF and BRF Arabia will enter a ten-year product supply agreement, with periodic renewal options, priced on a total cost plus 5% basis and subject to transfer pricing rules.
HPDC will hold 10% of BRF Arabia at closing, with plans to lift its stake to 30% and the right to increase to 40%.
Any increase will be via capital contributions split evenly between primary and secondary offerings, the group added.
Completion is contingent on customary approvals, including antitrust clearance, and is anticipated in the first quarter of 2026.
