The merger of BRF with Marfrig Global Foods has been approved by Brazil’s competition regulator and now moves to the final sign off stage.

The Administrative Council for Economic Defense (Cade) issued its seal of approval on Friday (5 September), while both companies acknowledged in individual statements that each of their boards had cleared the deal at meetings in August.

First announced in May, the merger will see Marfrig acquire all of the shares in BRF it does not already own – around 49% - and the creation of MBRF Global Foods to house the pair of businesses.

In turn, BRF shareholders will receive shares in Marfrig, although the numbers were not disclosed in any of the statements on Friday.

The merger brings together two companies that are predominately engaged in meat processing and supply to form a bigger rival to local Brazilian giant JBS, albeit the latter’s annual revenues and profits are still more than twice as large.

Cade and its General Superintendence (SG) approved the transaction “without restrictions”, concluding there was limited overlap in business interests and therefore “does not raise competition concerns”.

Marfrig is primarily engaged in beef processing and the marketing of value-added products such as ready meals and burgers. It is also involved in the sale and distribution of alcoholic and non-alcoholic beverages, along with activities in agriculture, livestock and forestry.

A selection of Marfrig’s meat brands includes Viva, Bassi Angus and Montana.

BRF, meanwhile, is a processor of poultry and pork from breeding through to production and sales. As well as fresh meats, the company supplies pasta, margarine and pet food. It owns the Sadia animal protein brand and Qualy dairy products.

Citing merger documents, Cade said “the companies' combined share in horizontally overlapping markets, where both offer similar and competing products, is less than 20%, a percentage below the threshold presumed to represent a dominant position”.

The regulator also observed that in “vertically integrated markets, when one company operates in one stage of the production chain and the other in a subsequent or earlier stage, each company's share is less than 30%, reducing the possibility of market foreclosure”.

Announcing the proposal in May, Marfrig and BRF said the merger would result in a “fiscal optimisation” of about 3bn reais ($554.4m) based on “net present value”, along with a reduction of expenses estimated at 320m reais a year.

In 2024, BRF generated 61.4bn reais in revenue and a net profit of 3.7bn reais.
Marfrig, meanwhile, notched up revenue of 144.2bn reais and net income of 2.8bn reais. Combined revenue and income in dollars amounted to $36.2bn and $1.1bn, respectively.

JBS would still be far bigger in terms of revenue, having posted a top-line result equivalent to $77bn last year. Net profit was $2.6bn.

Minerva Foods, another Brazilian meat business, had urged a review of the merger deal on competition concerns, according to the Cade statement.

That concern centred on the Saudi Agricultural and Livestock Investment Company (Salic) and its investment platform Salic International Investment Co.

Salic is a shareholder of Marfrig and also holds an interest in Minerva, which “could generate additional risks of coordinated effects”, Cade said.

Saudi Arabia’s state agricultural fund Salic also formed a joint venture with Minerva in 2021 with a 35% interest. Separately, Salic acquired 30.5% of Minerva in 2016 and an 11% stake in BRF in 2023, according to its corporate profile report for 2024.

However, the president of Cade, Gustavo Augusto, concluded the “participation” of the Salic entities in the merged business “is not part of the object analysed in this operation”.

The regulator added: “On the merits, the panel, unanimously, upheld the SG/Cade's decision and approved the transaction, in accordance with the vote of president Gustavo Augusto.”

Both Marfrig and BRF said in Friday’s statements that “the completion of the merger is subject to the satisfaction (or waiver, as the case may be) of certain conditions (including the final and binding approval of Cade) and the occurrence of the closing date”.