Brazilian meat giant JBS is to buy domestic poultry business Seara Brasil from local rival and fellow international meat processor Marfrig.

In a statement to the Brazilian stock market today (10 June), JBS and Marfrig announced the transaction, which had been the subject of speculation over the weekend.

JBS has struck a deal to buy Seara Brasil and a leather business Marfrig owns in Uruguay by taking on a portion of its rival’s debts. The deal values the two businesses at BRL5.85bn.

The companies said the transaction would help “rebalance the capital structure of Marfrig” and allow it to focus on its beef business in Brazil. Marfrig also plans to “redirect its strategy” on the foodservice industry and “accelerate” its international growth. Marfrig acquired the Seara Brasil unit when it acquired Seara Alimentos from Cargill in 2009

JBS will own the second-largest “processed meals platform” in Brazil. The company is the world’s largest beef processor although it does have a presence in the poultry industries in Brazil and the US. JBS entered Brazil’s poultry sector last year after leasing plants owned in the country by France’s Groupe Doux, which went into administration.

The companies will hold conference calls on the deal at 11:30 Brasilia time.

Click here for the companies’ statement.