Reuters
Published Aug 17, 2018 03:29PM ET
Brazil's Marfrig to sell U.S. unit to Tyson for $2.5 billion: sources
By Tatiana Bautzer and Paula Laier
SAO PAULO (Reuters) - Brazilian meatpacker Marfrig Global Foods SA (SA:MRFG3) has agreed to sell its U.S. subsidiary, a key McDonald's supplier, to Tyson Foods Inc (N:TSN) for $2.5 billion, two people with knowledge of the matter told Reuters on Friday.
Marfrig shares rose as much as 8 percent but reversed gains and were down 7.3 percent at 6.38 reais as investors reassessed the price of the deal. Tyson rose 1.2 percent to $61.71.
In a note to clients, Itaú BBA's equities team said the news is "negative for the stock," as the market hoped for a higher valuation of up to $3 billion, for chicken processor Keystone Foods. The bank kept its "underperform" rating on Marfrig.
Marfrig's controlling shareholder Chairman Marcos Molina, who owns around 35 percent of the meatpacker, agreed on Thursday to sell Keystone, a major chicken products supplier to McDonald's Corp (N:MCD) for $2.5 billion, according to the sources.
They asked for anonymity because they are not authorized to discuss the matter publicly.
One of the sources said Marfrig may announce the deal as soon as Friday after the market closes. Some small details related to the deal, such as potential spin off of some small assets from Keystone, is delaying a final agreement.
Newspaper Valor Economico reported the deal on its website earlier Friday.
Tyson and Marfrig declined to comment.
Marfrig Chief Financial Officer Eduardo Miron told journalists on Thursday that the company "can close the deal any moment."
Tyson entered exclusive talks to acquire Keystone in late July.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.