Brazilian Beef Tycoon Takes Control of Food Giant BRF’s Board

(Bloomberg) -- Marcos Molina dos Santos, the Brazilian beef tycoon who founded Marfrig Global Foods SA, is taking control of the board of food giant BRF SA in a move that may pave the way for a potential merger.

BRF shareholders approved Marfrig’s suggestion of making Molina chairman in a meeting on Monday morning, people familiar with the matter said, asking not to be named because the results aren’t public yet. Marfrig appointed nine of the 10 board members elected, with the remaining one being suggested by pension fund Previ, according to a statement published earlier Monday. 

Marfrig, the world’s second largest beef producer, has boosted its stake in BRF to 33.25% over the past months, fueling speculation of a merger that would create the world’s third-largest meat company by market value. If it crosses the 33.3% threshold, a so-called poison pill clause would be triggered, forcing the beef giant to launch a tender offer for the acquisition of the remaining stake at higher premium.

All names ran unopposed after the two major shareholders came to an agreement, according to the statement. Marfrig is BRF’s largest shareholder, while Previ is the third-largest, with a stake of about 5%.

The new board include Sergio Rial, who served as Chief Executive Officer at Marfrig and the Brazilian unit of Banco Santander SA, where he remains as chairman. Aldo Mendes, a former director at Brazil’s Central Bank and executive at Banco do Brasil SA, will occupy Previ’s chair.

The companies had negotiated a deal in 2019, but failed to agree on governance of the combined entity. BRF shares rose as much as 3.6% on Monday, while Marfrig gained as much as 5%, leading gains in the Ibovespa benchmark index.

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