National Beef Packing Company LLC announced that the owners of National Beef have entered into a membership interest purchase agreement with NBM US Holdings, an indirect subsidiary of Marfrig Global Foods S.A. under which NBM will acquire 51% of the outstanding ownership interests in National Beef. The operations and management of National Beef will remain unchanged with Tim Klein continuing as National Beef President and Chief Executive Officer upon completion of the transaction. The current owners of National Beef will continue as owners under the new structure.
Marfrig has agreed to pay US$ 969 million for the equity interest and, once the transaction is concluded, will become the world’s second-largest beef processor, with consolidated sales of R$ 43 billion (US$ 13 billion). The transaction is subject to certain limited conditions and will require customary regulatory approvals. It is expected to close in the second quarter of 2018.
“The acquisition of a majority interest in National Beef represents a unique opportunity for us,” said Marcos Molina, Chairman of Marfrig and Martín Secco, CEO of Marfrig. “With this transaction, we will have operations in the world’s two largest beef markets, will gain access to extremely sophisticated consumer countries and will be able to grow while maintaining rigorous financial discipline. We’re enthusiastic to be part of this successful history and looking forward to join the National Beef team.”
Founded in 1992, National Beef reported sales of US$ 7.3 billion (R$ 24.3 billion) in 2017 and, since 2011, has been controlled by Leucadia National Corporation, which currently holds a 79% interest. National Beef has a slaughtering capacity of 12,000 heads of cattle per day and is headquartered in Kansas City. It has 2 slaughterhouses located in Dodge City and Liberal, Kansas and accounts for approximately 13% of total U.S. cattle slaughtering capacity. National Beef is one of the most profitable beef companies in the United States. Once the transaction closes, Leucadia will transfer control to Marfrig and remain a minority shareholder in National Beef, with a 31% interest. The US Premium Beef, an association of American producers, will hold 15% and other shareholders with the remaining 3%.
Leucadia and the other investors have agreed not to sell their shares in National Beef for at least five years.
“National Beef is an outstanding company and we are excited to continue our partnership with Tim Klein and the rest of the National Beef team”, said Rich Handler, CEO of Leucadia, and Brian Friedman, President of Leucadia. “We are also pleased to welcome Marfrig as a partner in the company and believe the expanded partnership group will only enhance National Beef’s ability to serve its customers on a global basis.”
Tim Klein, President and CEO of National Beef added, “I am excited to welcome the Marfrig group as a partner in National Beef. Their broad global food platform will further strengthen our efforts to build our brand in new and existing markets as the demand for high quality U.S. beef grows. This transaction will be transparent to our valued employees, suppliers and customers.”
Source: National Beef Packing Co., Marfrig Global Foods S.A.
