São Paulo – Saudi Agriculture and Livestock Co. (Salic), from Saudi Arabia, signed an agreement to acquire 19.95% of the shares of Grupo Minerva, becoming a minority partner of the Brazilian meat company. The total sum of the deal is of USD 188.4 million. The announcement was made this Wednesday (23rd).
Salic was created in 2012 by the Saudi government to invest in the agriculture and livestock sectors in countries with markets open to receive foreign capital and owners of significant agricultural resources.
The company’s shareholding in the Brazilian meat company will be through Salic UK, the company’s subsidiary in the UK. With the agreement, Salic now has 48 million stocks of the Brazilian group and has the rights to appoint three members to the Board of Directors and one member to the Supervisory Board.
“The main reason that droves us to close the deal was the strategic partnership. Salic is not a financial investor, but a strategic investor in a region in which we have a strong participation. Minerva is the largest cooled meat exporter to the Middle East and the second largest of frozen meat”, said Fernando Queiroz, president of the Grupo Minerva, in a conference call with investors.
“We have participation in the main markets. Thus, it’s very important that we have closer ties with a player that understands, that knows, that has know-how within the market”, said the executive, also underlining that the deal strengthen the capital structure of the company.
In a statement released by Salic, the company’s CEO, Abdullah Aldubaikhi, said that the company is very satisfied in going forward with this investment in the Minerva group because it’s a meat company holder of a strong position in the market and good outlooks both in South America and throughout the world.
Salic’s arm in the UK will support Minerva in the expansion of its operations to new markets, especially in the Middle East, says the statement. The acquisition agreement will be finalized during Q1 of the 2016 fiscal year.
Last month, Saudi Arabia lifted the embargo to the Brazilian beef that was put in place in 2012. The end of the restrictions to imports of Brazilian meat happened with the signing of an international health certificate by Kátia Abreu, Brazil’s minister of Agriculture, Livestock and Supply, and by Salah Almaiman, vice-president of the food sector of the Saudi Food and Drug Authority (SFDA).
“Saudi Arabia is one of the world’s main food importers. This opens up for us an opportunity to distribute, to get closer to clients in the Middle East”, said Queiroz. Currently, Minerva’s market share in the Middle East and North Africa stands at 34%.
*Translated by Sérgio Kakitani