Brazil's BRF sees savings of up to $180 mln from Banvit deal (updated)

Banvit Bandirma Vitaminli Yem Sanayi AS

10/01/2017 13:16

(Adds comments from conference call, background on OneFoods 
unit) 
    By Ana Mano 
    SAO PAULO, Jan 10 (Reuters) - Brazilian food processor BRF 
SA  BRFS3.SA  sees cost savings and other efficiencies from its 
investment in a Turkish poultry producer reaching up to $180 
million, its chief executive officer said on Tuesday.  
    CEO Pedro Faria said on a conference call that the 
investment in Banvit Bandirma Vitaminli Yem Sanayii AS 
 BANVT.IS  will give BRF's OneFoods halal meat unit a roughly 40 
percent share of the Middle East market. 
    BRF will take a 60 percent stake in the Banvit venture and 
the Qatar Investment Authority (QIA) will take 40 percent, 
according to a securities filing on Monday.  urn:newsml:reuters.com:*:nL1N1EZ1P3 
    The venture, announced soon after the creation of BRF's 
Dubai-based OneFoods Holdings Ltd, underscores its plan to 
establish a strong foothold in the Middle East. The market for 
halal meat, which follows Muslim dietary rules, could grow to 
$60 billion by 2020, say analysts. 
    Reuters reported last week that BRF plans to raise about 
$1.5 billion from listing 20 percent of OneFoods in London by 
late March or early April.  urn:newsml:reuters.com:*:nL1N1EV0OH 
    Banvit is "a first step to accelerate growth in region," 
Faria said, adding that OneFoods can partner up with investors 
such as the QIA to boost it regional power.  
    BRF's shares rose 2 percent in early trading in São Paulo.  
    "The involvement of QIA as strategic partner creates a very 
interesting funding opportunity for BRF," Faria said, referring 
to potential acquisitions and organic growth. 
    Qatar's stake in the Banvit venture could be converted into 
OneFoods shares if the unit goes through with an IPO, Alexandre 
Borges, BRF vice president for finance and investor relations 
said in an interview on Monday. 
    The first phase of the deal, which puts Banvit's enterprise 
value at $470 million, involves acquiring 79.5 percent of the 
company's shares. A mandatory tender offer for the rest of the 
company will then mirror the same conditions given to Banvit's 
controlling shareholders, Faria said. 
 
 (Additional reporting by Paula Laier; Editing by Dominic Evans 
and Jeffrey Benkoe) 
 ((ana.mano@thomsonreuters.com; Tel: +55-11-5644-7704; Mob: 
+55-119-4470-4529; Reuters Messaging: 
ana.mano.thomsonreuters.com@reuters.net)) 
 
Keywords: BANVITAS M&A/BRF