Sadia Offers US$1.7 Billion for Perdigao

18-07-2006 | |

Brazil’s largest food processor, Sadia, has offered to buy rival company Perdigao, the country’s second largest processor, for as much as 3.7 billion reais (US$1.7 billion).

The share value of both companies rose after Sadia said in a filing to the country’s anti-trust agency that it offered to pay as much as 27.88 reais a share for all existing shares of Perdigao.

Sadia is offering a 21 percent premium on Perdigao’s shares, based on the company’s closing price of 23 reais a share on July 14.

The acquisition would help move Sadia closer to its goal of fending off foreign takeovers and overtaking international rivals including Tyson Foods, Smithfield Foods and Pilgrim’s Pride, the world’s largest meat processors.

By acquiring Perdigao, Sadia could become Brazil’s fourth- biggest exporter with revenue from overseas operations totalling US$5.5 billion a year.

Sadia last year processed almost 1 million metric tons of chicken, 387,000 tons of pork and cold cuts and 4.6 million tons of animal feed in 13 plants across Brazil. The company had 45,400 employees at the end of last year. Perdigao has 35,600 employees in 16 plants.

Sadia and rivals have been ramping up chicken exports and boosting capacity to take advantage of reduced supply and poultry import bans from countries affected from the avian flu, such as Colombia, Croatia, Romania and Turkey.

Poultry prices in Brazil have fallen about 20 percent this year, helping push the country’s annual inflation rate down to a seven-year-low in June.