Brazilian meat producer JBS has agreed to acquire local poultry and pork producer Seara Brasil, which is owned by Marfrig Alimentos, in a deal worth BRL5.85bn ($2.72bn) including the assumption of outstanding debt.
As part of the deal, JBS will also purchase Zenda, a division of Marfrig in Uruguay, which is involved in industrialization and commercialization of finished and cut leather hides.
The deal will allow JBS to strengthen its presence in the Brazil's poultry and pork market, while Marfrig will be able to cut its $6.1bn debt by about 60%.
The acquisition does not include Marfrig's overseas assets such as the Keystone and Moy Park brands which are owned by Seara Foods, a Marfrig unit that controls Seara Brasil.
JBS chief executive officer Wesley Batista was quoted by Reuters as saying that the acquisition of Seara will provide the company with an additional BRL10bn ($4.66bn) in annual revenues as well as boost its poultry production capacity to 12 million animals per day.
This makes JBS the second leading processed foods company in Brazil and a global leader in poultry segment, Batista added.
Recently, Marfrig announced plans to off-load its debt by as much as $1bn by the end of this year through cost-cutting, sales of units and restructuring initiatives.
Marfrig acquired Seara in 2009 for about $900m, which helped Marfrig to boost its branded processed foods portfolio.
