Brazilian meatpacker Minerva Foods will use a loan from US investment bank JP Morgan to close a BRL7.5 billion ($1.5 billion) acquisition of assets from Brazilian rival Marfrig, Minerva CFO Edison Ticle said on Tuesday.
Minerva has already made a down payment of $1.5 billion and “J.P. Morgan has extended a two-year BRL6 billion credit line, which will be available for 18 months,” Ticle told LatinFinance by e-mail.
He spoke a day after Minerva announced that it will buy 16 slaughterhouses from Marfrig, including 11 in Brazil, three in Uruguay, one in Argentina and one in Chile, according to a securities filing.
“The transaction will catapult Minerva to a leading position in the Latin American beef industry, growing from around 20% to around 34% of the region’s beef exports,” said BTG Pactual equity analysts.
There are risks with the deal, however.
“Our greatest fear is that this deal puts Minerva in a similar position to when it acquired JBS’ assets in South America back in 2017, and which ended up taking leverage too high before they could be managed,” BTG Pactual said in a note.