Brazilian meatpacker Marfrig Global Foods SA has agreed to sell its U.S. subsidiary, a key McDonald’s supplier, to Tyson Foods Inc for $2.5 billion, two people with knowledge of the matter told Reuters on Friday.
Marfrig shares rose as much as 8 percent but reversed gains and were down 7.3 percent at 6.38 reais as investors reassessed the price of the deal. Tyson rose 1.2 percent to $61.71.
In a note to clients, Itaú BBA’s equities team said the news is “negative for the stock,” as the market hoped for a higher valuation of up to $3 billion, for chicken processor Keystone Foods. The bank kept its “underperform” rating on Marfrig.
Marfrig’s controlling shareholder Chairman Marcos Molina, who owns around 35 percent of the meatpacker, agreed on Thursday to sell Keystone, a major chicken products supplier to McDonald’s Corp (MCD.N) for $2.5 billion, according to the sources.
They asked for anonymity because they are not authorized to discuss the matter publicly.
One of the sources said Marfrig may announce the deal as soon as Friday after the market closes. Some small details related to the deal, such as potential spin off of some small assets from Keystone, is delaying a final agreement.
Newspaper Valor Economico reported the deal on its website earlier Friday.
Tyson and Marfrig declined to comment.
Marfrig Chief Financial Officer Eduardo Miron told journalists on Thursday that the company “can close the deal any moment.”
Tyson entered exclusive talks to acquire Keystone in late July.
By Tatiana Bautzer and Paula Laier
Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.
US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.
Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.