FDBusiness.com

Brazilian food processor BRF has agreed to purchase a 60% stake in Banvit, the largest poultry producer and market leader in Turkey. The deal marks another step in BRF international expansion. The $470 million transaction will be via a joint venture between BRF and Qatar Investment Authority (QIA), the sovereign fund of Qatar, which will hold a 40% interest.

Banvit is a fully integrated producer, with facilities ranging from feed control to final food processing. The company has five feed plants, four hatcheries and five production plants. “The units are located in the country’s West, which concentrates most consumers, and East, which positions it as the only company capable of serving both the domestic and export markets,” says Pedro Faria, global chief executive of BRF.

The assets of Banvit will be incorporated into OneFoods, a BRF subsidiary led by Patricio Rohner and dedicated to the halal market. “The acquisition of Banvit is the first step on the agenda to accelerate the growth of OneFoods, which holds market share in chicken products of approximately 45% in Saudi Arabia, United Arab Emirates, Kuwait, Qatar and Oman, countries where it operates with own distribution and a broad product portfolio,” explains Patricio Rohner.

Turkey, which has a population of 80 million, accounts for 10% the global consumption of halal poultry. Even so, local per-capita chicken consumption is low, at around 20 kilograms per year, and the penetration of processed food products is low, which means that the Turkish market offers excellent potential for growth.

“In addition to the growth opportunities offered by the Turkish market, especially in processed products, we see important commercial and operational synergies to capture by integrating the operations of Banvit and OneFoods, which will further consolidate our strength and leadership in the halal animal protein market,” says Patricio Rohner.

The transaction, which is in two phases involving the acquisition of a 79.5% interest in Banvit, followed later by a tender offer for the remaining minority interest of 20.5%, is subject to approval by the antitrust authority.

Owner of brands such as Sadia, Perdigão, Qualy Chester, Perdix and Paty, BRF is one of the biggest producers of refrigerated and frozen protein foods in the world. The company was created after the merger of the Brazilian companies Perdigão and Sadia, announced in 2009 and completed in 2012. It operates in the meat (poultry and swine), processed meat, dairy, margarine, pasta, frozen pizza and vegetable segments, and is responsible for 14% of the world’s poultry trade.