In May, BRF and Marfrig announced that they were in talks for a potential partnership that would have created a new entity with a combined sales of R$17.4bn in the first quarter of the year.
However now that the talks have concluded, the “commercial relationship will remain unchanged”. It is understood that the businesses were unable to reach an agreement on the terms and conditions related to the governance structure for the proposed combined company. The two businesses did have 90 days, with an option to extend by a further 30 days, to negotiate however that amount of time wasn’t required.
If it the merger had gone ahead, the businesses would have used the partnership to reduce exposure to sector risks and generate synergies due to the balance and complementarity of products, services and geographic diversification, with a material presence in Brazil, the United States, Latin America, the Middle East, and Asia.
It is expected that there will be no modifications to the practices, conditions and terms set forth in the existing agreements entered into by both parties.
BRF said that the company's administration “reinforces its commitment to implement the Strategic Plan guidelines and to continue evaluating business opportunities that may generate value for its shareholders”.