Shareholders in Brasil Foods (BRF), formerly Perdigao, and Sadia approved plans to merge the two groups at a special shareholders meeting.

Under the merger agreement, after Perdigao has changed  its name to BRF, Sadia’s majority shareholders – 92% of shareholders who vote as a block – will create a new holding company, HFF. Shares in HFF will then be converted into BRF shares at a “control premium” ratio of 1 to 0.166247.

The remaining 8% of Sadia’s preferred free-float shareholders would be offered BRF shares at 80% of the control premium value.

Current Perdigao shareholders will control 68% of the new entity and Sadia will operate as a 100% owned subsidiary of BRF.