Brazil based Marfrig Global Foods is set to acquire controlling interest in USA based National Beef making Marfrig the world’s second largest beef producer. Marfrig is expected to have annual sales of over $13 billion with the acquisition of 51% of National Beef and will also gain access to markets such as Japan and South Korea.
National Beef Packing Company is the fourth largest beef processor in the USA. Marfrig Global Foods is set to pay $969 million for the equity interest in National Beef Packing Company.
National beef was founded in 1992 and has reported sales of $7.3 billion in 2017. Since 2011 National beef has been controlled by Leucadia National Corporation holding 79% interest in National Beef. Headquartered in Kansas City, National Beef has a slaughtering capacity of 12000 cattle per day and has two slaughterhouses in Dodge City and Liberal , Kansas that accounts for 13% of the total US cattle slaughtering capacity. Leucadia National Corporation will remain a minority shareholder in National Beef after the Marfrig acquisition controlling 31% interest of National Beef. US Premium beef which is an association of American producers will hold 15% and other shareholders will hold remaining 3%.
National Beef will be valued at $2.3 billion including debt after the transaction and Leucadia and other investors have agreed not to sell their National Beef shares for at least five more years.
According to Martín Secco, CEO of Marfrig:
“The acquisition of National Beef represents the realization of a unique opportunity. With the transaction, we will have operations in the world’s two largest beef markets, will gain access to extremely sophisticated consumer countries and will be able to grow while maintaining rigorous financial discipline.”
Marfrig will finance the transaction from a loan from Rabobank.
Marcos Molina, chairman of the Board of Directors of Marfrig Global Foods added the following about the acquisition
“The acquisition of National Beef reflects our sustainable growth strategy. From now on, we have become the Brazilian company of the sector with the best financial health, proved into the lowest rates of leverage.”
National Beef CEO Tim Klein along with other key executives will continue and manage at National beef. National Beef will consist of nine members, five from Marfrig, two from Leucadia and two other minority members.
Marfrig financial advisor was Rabo Securities USA, Linklaters LLP acted as international counsel and Lefosse Advogados acted as Brazilian counsel to Marfrig.
About National Beef
Headquartered in Kansas City, Missouri, USA, National Beef Packing Company processes and markets fresh beef, beef- and pork-based ready-to-eat meals, beef by-products and leather in the domestic and international markets. It has operations in Liberal, Dodge City and Kansas City in Kansas, in Hummels Wharf, Pennsylvania, in Moultrie, Georgia, and in St. Joseph, Missouri.
National Beef employs around 8200 employees.
About Leucadia National Corporation
Leucadia is a diversified holding company with investments in diverse sectors, including finance (Jefferies Group), real estate (HomeFed), processed meat (National Beef), oil & gas (Vitesse Energy and JETX Energy) and car dealership (Garcadia), among others. Leucadia National Corporation is headquartered in New York, USA.
About Marfrig Global Foods
Headquartered in Brazil, Marfrig Global Foods is in involved in the production, processing, distribution, and sale of animal protein, such as beef, lamb, and poultry; and various other food products, including breaded products, ready-to-eat meals, fish, frozen vegetables, desserts, and others. Operating through Marfrig Beef and Keystone segments, Marfrig also engages in energy trading and associated services business; and export of premium beef and lamb cuts to approximately 100 countries. Marfrig was founded in 1986 and employs around 32826 employees worldwide.