BRF abandons planned sale of pet-food arm after considerable evaluation

BRF abandons planned sale of pet-food arm after considerable evaluation

BRAZIL- BRF, the Brazilian meat giant, has decided to abandon its initial plan to sell its pet food arm, marking a strategic shift more than eight months after the company first announced its intention to divest. 

During the announcement of the planned sale, there were speculations that Nestle would be buying the pet food arm, but the two parties distanced themselves from the rumor. 

BRF had hired Banco Santander as a financial advisor and was already in discussions with would-be buyers for its pet food arm. 

BRF intended to streamline its operations, and following the restructuring after the sale, BRF planned to focus on its main business of chicken, pork, and processed food.

However, the publicly listed company has now revealed that its management has opted to maintain the pet food business, signaling a reevaluation of its strategic priorities.

The competitive sale process, which was initiated in February, has been halted, and BRF is now committed to driving growth in the pet food segment. 

Despite being the third-ranked player in the Brazilian pet food market, BRF asserts its leadership in the super-premium natural pet feed category.

In a statement released on November 13, the company outlined its plans for the future, stating, “The company will continue to drive growth in this segment by increasing distribution through specialized channels, strengthening the brand’s strategy by segment and channel, consolidating integration synergies, and advancing the export expansion strategy.

Banco Santander had been enlisted as the financial advisor for the sale of the pet food business, with initial estimates suggesting a potential deal value of 2 billion reais (US$405.5 million today). 

However, BRF’s decision to retain the business underscores its confidence in the pet food segment’s growth potential.

In 2021, BRF expanded its presence in the pet food market by acquiring two Brazil-based pet food makers, Mogiana Alimentos and Hercosul. 

The company’s pet-food segment now includes BRF Pet, Mogiana Alimentos, Hercosul Alimentos, Hercosul Soluções em Transportes, Hercosul Distribuição, and Hercosul International.

BRF’s decision to retain its pet food arm reflects the company’s commitment to adapting its strategy in response to market conditions and leveraging opportunities for growth in specific segments. 

Shareholders and industry observers will be watching closely to see how this strategic pivot contributes to BRF’s overall performance in the coming months.

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