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Brazil: Mergers and Acquisitions and The Halal Industry 

by Fabio Figueira

Published: March, 2017

Submission: March, 2017

 



As published in international media, Brazil is still facing economic problems related, for example, to economic growth rate and unemployment. However, Brazil remains a country where investment opportunities continue to exist. Brazil has the advantage of having a large internal market due to the size of its population and of being well positioned geographically in South America, so the country can be a platform for the export of products to other countries in the region.


Based on a quick research of publications made by the Brazilian antitrust authorities for those transactions, which would have reached the notifi cation thresholds related to merger filings, one may find transactions where Brazilian companies/assets have been the target of foreign investment.


A first example is the acquisition by Italian group Enel of the capital stock of Celg Distribuicao (Celg) in a privatization auction. Celg is na electricity distribution company in the State of Goias. The Italian group already has other investments in Brazil such as participation in electricity distribution companies in the states of Rio de Janeiro (Ampla Energia e Servicos) and Ceara (Companhia Energetica do Ceara).


A second example is a transaction entered into by French group Total and Brazilian state-owned oil company Petroleo Brasileiro–Petrobras as to a concession agreement related to the oil and gas industry.


As mentioned in prior reports, the Brazilian company BRF has created a subsidiary, OneFoods, whose focus is the Muslim markets — Halal food. BRF now intends to raise US$1.5 billion with the sale of 20% of OneFoods’s capital stock through an IPO. BRF estimates that OneFoods is valued at around US$6.5 billion with its annual gross revenues amounting to US$2 billion.


According to BRF, OneFoods has a 45% market share with regards to poultry in Middle Eastern countries, namely Saudi Arabia, the UAE, Kuwait, Qatar and Oman.


 


 

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