Antitrust authority sees no harm to competition in landmark consolidation.
The technical team at Brazil’s Administrative Council for Economic Defense (CADE) has recommended unconditional approval of the merger between meat giants Marfrig and BRF. If no commissioner challenges the decision within the next 15 days, the merger will be considered definitively approved.
Under the deal, BRF shares will be incorporated into Marfrig at a ratio of 0.8521 Marfrig shares per BRF share. Over the past few years, Marfrig gradually increased its stake in BRF—owner of the iconic Brazilian brands Sadia and Perdigão—until it gained control. According to the antitrust opinion, Marfrig already holds 50.49% of BRF shares, so the transaction does not involve a transfer of control.
The antitrust watchdog’s General Superintendence issued the approval in a detailed, albeit partially confidential, opinion that forms part of the formal case file. Some information remains sealed, including the specific product lines affected, such as hamburgers, kibbeh, and meatballs.
The technical analysis concluded that the combined market share of the two companies in horizontally overlapping markets remains below 20%—the threshold beyond which dominance and potential market power are presumed—or, where it exceeds 20%, it stays under 50%. According to CADE, this indicates no causal link between the transaction and any potential abuse of market power.
In vertically integrated markets, the concentration remains under 30%, also below the threshold considered capable of foreclosing competition. As a result, CADE’s technical team found no evidence that the merger would harm the competitive landscape.
Marfrig and BRF announced the merger on May 15, forming the MBRF Global Foods Company. The new group will generate annual revenues of R$152 billion (approx. $27 billion) and rank among the largest food companies globally, with operations in 117 countries and an annual output of approximately 8 million tonnes of food products.
The combined company will employ 130,000 people worldwide and market brands such as Qualy, Banvit, and Bassi—alongside Sadia and Perdigão, which merged years ago to form BRF.
MBRF’s sales will be composed of 38% processed foods, 34% poultry and pork, and 29% beef. Regionally, 43% of the company’s net revenue comes from the U.S., 24% from Brazil, 20% from Asia, and 13% from other markets.
BRF has been preparing for the merger for the past three years, ever since Marfrig took control of the poultry and pork company. After BRF returned to profitability, the two companies began aligning their operations to capture commercial synergies.
The companies have identified R$805 million in annual commercial and logistical synergies, between R$400 million and R$500 million of which are expected within the first year, with the remainder projected for the medium and long term. On the revenue and cost fronts, additional synergies are expected to reach R$485 million per year.
They also anticipate annual expense reductions of R$320 million through initiatives such as unifying commercial and logistics structures, consolidating a single operating system, and streamlining the corporate framework. The merger is also expected to bring tax optimization benefits of up to R$3 billion.
Given that BRF was already a Marfrig subsidiary, the companies had expected a smooth approval process from CADE.
Source: Valor International
