Marfrig to terminate contract to sell Uruguay plants to Minerva
Companies clash over the cancellation of a 2023 deal worth US$124.5 million
BRAZIL – Brazilian meat processor Marfrig recently said that it has ended its agreement to transfer three beef plants in Uruguay to rival Minerva, citing unmet contractual conditions within the agreed timeframe.
The agreement, first signed in August 2023, involved the sale of the facilities for US$124.5 million, but disagreements have now surfaced between the two companies over the validity of the termination.
Marfrig stated in a securities filing that the deal had a 24-month period for meeting specific conditions, which it said were not fulfilled, leading to the decision to cancel.
In contrast, Minerva, which holds the position of South America’s largest beef exporter, responded in its own filing that the contract is still active and that it will continue to pursue clearance from competition authorities.
The dispute emerges as Brazilian beefpackers face a new 50% tariff when exporting beef and related products to the United States, making access to processing capacity outside Brazil increasingly valuable.
Regulatory hurdles in Uruguay
Uruguay’s antitrust regulator had previously blocked the transaction after requests from ranchers and meat traders, who argued the deal would allow Minerva to control around 43% of the nation’s cattle slaughtering capacity.
To address these concerns, Minerva offered remedies, including a commitment to divest two of the three plants it sought to acquire from Marfrig, though this did not immediately resolve the regulatory impasse.
The sale of the Uruguay units was part of a much larger transaction announced in 2023, in which Marfrig agreed to hand over 16 slaughterhouses to Minerva for a total of US$1.38 billion.
While the broader deal continues to face regulatory scrutiny, Marfrig emphasized that the three Uruguayan plants at the center of the current disagreement remain in normal operation.
The latest development highlights ongoing tensions between the two companies, with investors now waiting to see whether legal or regulatory decisions will determine the outcome of the Uruguay transaction.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
