Brazil’s BRF Said To Eye $1.5 Billion IPO For Sadia Unit
BRF SA, Brazil’s biggest processed-food maker, is considering selling stock in its Sadia Halal unit in a deal that could value the food products company at about $5 billion, said people familiar with the matter.
BRF is speaking with advisers locally about potentially selling shares in 2017, the people said, asking not to be named as the details aren’t public. An initial public offering of the company, which sells frozen food products to markets including the Middle East, could raise $1.5 billion, though no final decisions have been made on the location or timing of a sale, they said.
Sadia’s IPO could be the largest from Brazil since 2012 when BTG Pactual Group raised about $1.9 billion, data compiled by Bloomberg show. BRF said last month that it would put Sadia into a separate subsidiary to supply food to Muslim markets, and that it was reviewing options for the business.
BRF said in an e-mailed statement that while strategic alternatives are being analyzed to increase the unit’s expansion potential, it would be “premature to say that there is something of this nature going on.” The company declined to comment on the potential value.
In April, BRF reported a 92 percent slump in first-quarter net income, the worst results in four years. Billionaire Chairman Abilio Diniz said the company was confronting its most challenging period ever amid a surge in domestic costs for supplies and a deepening recession. BRF makes more than 5,000 products from margarine to lasagna and is the world’s largest poultry exporter.
BRF shares jumped 4 percent to 52.57 reais at 10:18 a.m. in Sao Paulo. The stock had declined 8.8 percent this year through Thursday.
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