BRF continues to be interested in beef, even without fusion with Marfrig

BRF is still open to transactions that extend its product offerings and overseas presence after the end of conversations about a possible merger with Marfrig. The producer of chickens can engage in mergers, strategic partnerships or long-term supply agreements that ensure access to beef supplies, as a way to strengthen their business in the areas of food service and processed foods, According to the company's global CEO, Lorival Luz. BRF, which also produces pork, would "ideally" be a third animal protein, as it seeks to develop new products for its portfolio, Luz said in an interview in São Paulo. The company is not, however, involved in any negotiation, he ponded. "[The cattle sector] is on the map – the question is how, when," he said. Conversations with Marfrig BRF surprised investors at the end of May by revealing conversations about a possible merger with Marfrig, the world's largest beef producer after JBS. The company's actions fell with the news, pushed by questions about governance and the potential to generate value of the new company in view of the history of bad results of Marfrig and the tighter margins of the sector. Negotiations with Marfrig, which would have given the BRF a desired presence in the United States, ended even before the studies on possible gains with synergies were concluded. This is because the parties did not agree on how the new company would be managed, Luz said. While the BRF has a pulverized base of shareholders, Marfrig is controlled by its founder, Marcos Molina. The BRF command is now fully dedicated to making the company return to blue in 2019, after recording losses in the last three years, and reducing net debt to less than three times the EBITDA until next year, Luz said. In addition, the company is in advanced conversations, with more than one agent, in search of a partnership for the production of chicken in Saudi Arabia, where the BRF already occupies a dominant position. "It's a priority for BRF. I would like to see the negotiations concluded by the end of the year, "Luz said.