BRF S.A. reports negotiations with Marfrig on potential business combination
In a regulatory filing, BRF S.A. informed its shareholders and the market, "in the context of the assessment of strategic options that may generate value for its shareholders," that it has started negotiations with Marfrig S.A. in connection with a potential business combination between the two companies. The company's board approved the execution of a binding Memorandum of Understandings between Marfrig and the company setting forth rules and conditions regarding the access to information that provides for an exclusivity period of ninety days, renewable for additional thirty days, during which neither party may begin negotiations with third parties. "In the context of such analysis, the company and Marfrig shall evaluate, with their respective legal, accounting and financial advisors, the economic benefits that may result from the eventual implementation of the Transaction, as well as the most efficient corporate structure to be adopted," the filing stated. "Pursuant to the Memorandum of Understandings, the valuation of any combination will be based on the average of the daily weighted price quotation of the shares of each company in the last forty five calendar days in B3 S.A. - Brasil, Bolsa, Balcao immediately prior to the date of disclosure of this Material Fact, that is, between April 15 and May 29, inclusive, which would result in an equity ownership by the shareholders of the company of 84.98% and by the shareholders of Marfrig of 15.02%. The company clarifies, however, that the companies will conduct a reciprocal due diligence process during the exclusivity period, which results may, at the joint discretion of both companies, cause the terms of the Transaction to be adjusted," the filing added.