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Wed 23 Dec 2015 06:50 PM

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Saudi Arabia to take $390m stake in Brazil beef producer

State-owned Salic agrees to buy 47.8m shares of Minerva, could rise to as many as 99.7m

Saudi Arabia to take $390m stake in Brazil beef producer

Saudi Arabia agreed to take a 20 percent stake in Minerva in a transaction that will raise as much as SR1.56 billion ($390 million) for one of Brazil’s largest beef producers and help it gain better access to markets in the Middle East.

State-owned Saudi Agricultural & Livestock Investment Co, or Salic, will acquire 47.8 million new shares of Minerva at 15.60 reais each, the meat company said late Tuesday in a filing. The stock sale may eventually comprise as many as 99.7 million shares. Minerva said the proceeds will allow it to reduce debt and help finance capital spending plans.

Salic was formed three years ago to improve Saudi food security by investing in agriculture and livestock around the world. In July, the company and US grain trader Bunge Ltd. acquired a majority stake in the former Canadian Wheat Board for C$250 million ($180 million) to gain access to grain exports from Canada.

Minerva said earlier this month it sees Brazilian beef consumption falling 10 percent this year as consumers, hit by the shrinking domestic economy, switching to cheaper chicken and pork. Still, Brazilian meat companies have seen their exports boosted by this year’s weakness of the real.

“The Middle East market is one of the regions,. after Southeast Asia, that is growing at a consistent rate” in terms of meat consumption, Minerva Chief Executive Officer Fernando Queiroz said Wednesday on a conference call with analysts and investors.

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