Deal still awaits CADE’s green light as antitrust review may shift to full proceedings.
Shareholders of BRF and Marfrig approved the long-awaited merger between the two food giants on Tuesday, paving the way for the creation of MBRF—a R$152 billion company in net revenue under the control of businessman Marcos Molina. While the vote had been widely anticipated, the companies’ shares reacted differently on the B3: BRF fell 0.71% to R$19.49, while Marfrig gained 3.8% to R$22.14.
With the shareholder approval secured, the merger now hinges on authorization from Brazil’s antitrust authority, the Administrative Council for Economic Defense (CADE). On Friday (August 1st), CADE President and case rapporteur Gustavo Lima issued an order converting the review from a fast-track to a standard proceeding.
In the decision, he instructed the companies to submit a new, full-form filing within 15 days of the order’s publication — dated August 1. The switch must still be voted on by CADE’s full board, which is scheduled to meet today.
In a joint statement, BRF and Marfrig expressed confidence in the deal’s completion, emphasizing that it remains subject to CADE’s approval.
CADE’s General Superintendence had already approved the merger in June, but reopened the case after challenges from Minerva Foods and, more recently, Nova Almeida Participações—a fund managed by Latache Capital, a minority shareholder in both BRF and Marfrig.
Latache voted against the deal but was overwhelmingly outvoted. BRF’s shareholder meeting saw 90% participation, with 78.39% of total votes in favor. The company’s controlling bloc — comprising Marfrig and the Saudi-backed Salic fund — holds a 69.9% stake, while minority shareholders account for 25.3%.
A significant share of BRF votes came through remote participation: 43.8% were in favor, representing 71.5% of valid remote votes.
Marfrig’s shareholder meeting had 86.74% participation, with 86.71% approving the merger. The company is controlled by the Molina family, which holds 75.3% of shares.
In a statement, BRF said the vote reflected “validation by the majority of minority shareholders,” reinforcing confidence in the process. The company added that the merger followed “strict compliance with applicable legal and regulatory protocols and best corporate governance practices.”
The vote was delayed amid criticism from minority shareholders. Investors like Latache questioned the conversion ratio of BRF shares into Marfrig stock and filed a request with the securities regulator (CVM) to postpone the meetings. Under the approved plan, each BRF share will be converted into 0.8521 Marfrig share.
The main opponent of the deal had been Previ, the pension fund for Banco do Brasil employees and a historic BRF shareholder, which argued the exchange ratio undervalued BRF. However, Previ sold its stake on July 14.
Latache still holds BRF shares and is betting on a review by CADE. Valor learned that the fund is also considering an appeal after losing a lawsuit in federal court. Latache declined to comment.
Minority shareholders who opposed the deal now have 30 days to exercise their right to withdraw from the merger and sell their shares under special conditions.
The deal's conclusion now rests with CADE, where it may proceed under the standard review process.
Source: Valor International
