Santander says lapse of asset sale deadline in Uruguay could favor both companies.
The expiration of the deadline for completing Marfrig’s sale of three plants to Minerva in Uruguay may not be a bad outcome for either company, analysts say. Marfrig announced last week that the contract had expired and was no longer valid, but Minerva stated it disagrees and is still awaiting approval from Uruguay’s antitrust authority.
“We view this as a slightly positive result for both companies. Minerva avoids antitrust risks, preserves balance-sheet flexibility, and keeps room for potential extraordinary dividends,”
wrote Santander analysts
.Marfrig, meanwhile, “retains exposure to Uruguay, where favorable cattle cycles and the potential impact of higher U.S. tariffs on Brazilian beef could support performance,” they added.
The three Uruguayan plants involved in the deal are located in San José, Salto, and Colonia, and are continuing normal operations. Since the deal was signed in August 2023, the decision has been in the hands of the Comisión de Promoción y Defensa de la Competencia (COPRODEC), Uruguay’s antitrust regulator, which has rejected the transaction multiple times.
Following those setbacks, Minerva submitted a revised proposal in February, agreeing to acquire the plants and resell the Colonia facility to India’s Allana Group, a producer and exporter specializing in halal meat products.
“The final decision by COPRODEC may come in September, but regulatory resistance suggests a low probability of approval,”
Santander noted.
BTG Pactual analysts highlighted that, since the contract terms were never disclosed, it remains difficult to predict the next steps. However, they believe the impact is smaller than initially expected.
“The implications for both companies, regardless of whether the deal moves forward, are likely less significant today than they first appeared,”
BTG’s report stated.
For BTG, Marfrig’s ongoing merger with BRF reduces the importance of deleveraging through asset sales. Minerva, on the other hand, would have to pay R$675 million ($123,8 million) — or R$750 million including interest — for the Uruguayan assets, which are expected to generate roughly R$100 million in annual EBITDA.
“Minerva has already raised capital to strengthen its balance sheet and continues to deliver results with the assets it has already integrated,”
BTG added.
Source: Valor International
