Marfrig and BRF merger to take legal headquarters to the US

The merger between Marfrig and BRF, announced on Thursday (15), represents a strategic move that, in addition to consolidating the creation of MBRF Global Foods Company, opens space for a possible re-domiciliation of the company – that is, the change of the legal headquarters to the United States.

The objective is to position the new group more competitively in the international market, especially in North America.

“The process paves the way for the re-initialization of the company,” said BRF CEO Rui Mendonça, who participated in the announcement alongside Marcos Molina, chairman of the board of Marfrig, and other executives from both companies.

With a presence in 117 countries and annual revenue of R$152 billion , MBRF is already the seventh largest company in Brazil , Molina highlighted. “We are creating a food company with iconic and recognized brands, based on a 100% integrated multiprotein platform,” he said.

For him, the merger is the natural outcome of a cycle that began three years ago, when Marfrig took control of BRF. “We turned BRF around. The company is once again generating value for its shareholders and distributing dividends, performing above its historical levels and breaking operational and financial records every quarter,” he said.

The new phase aims at operational, strategic and tax synergies, as well as opportunities for international expansion. “From now on, the merger is a necessary step that will allow us to capture a new wave of relevant synergies,” Molina highlighted.

He also pointed to North America as a growth frontier for the company, and where a possible re-marketing could be advantageous. “The transaction also brings a great opportunity in North America, which leads us to consider the possibility of re-marketing, while maintaining financial discipline and our focus on added value.”

Operating gains

BRF CEO Miguel Gularte said that operational synergies from the merger between BRF and Marfrig could reach R$805 million in the first year . According to him, R$485 million would come from operational gains and another R$320 million from cost reductions.

“We divided and mapped all the synergies, basically, on four fronts: commercial, logistics, supplies and corporate structure” , he explained, this Friday, in a conference call with analysts.

On the commercial front, Gularte estimates synergies, particularly in the use of BRF's customer base and the sale of beef under the Sadia brand. "We have the possibility of beef under the Sadia brand and, mainly, the use of our commercial and export teams," he explained.

In the logistics area, the focus is on centralizing distribution centers and integrating international offices. In supplies, the executive highlighted the partnership with National Beef and the use of value engineering practices. “Supplies are a super-relevant account, around R$230 million,” he said.

In the administrative and corporate structure areas, synergies will focus on optimizing the company's corporate structure. "We also have the capacity to maximize the entire composition of the company, from the holding company to other aspects," he added.

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