Brazil's Sadia seeks main meat rival Perdigao

BRAZIL - Brazil's largest pork and poultry processor Sadia offered on Monday to pay 3.7 billion reais ($1.7 billion) for a majority stake in its largest domestic rival Perdigao in a deal that would give it a commanding advantage at home and added scale abroad.

Sadia's bid, which will make it the commanding leader in the domestic meats market and will have to be approved by the local antitrust regulators, may be a defensive move against a potential takeover bid for Perdigao, Brazil's No. 2 meat processor, by a large foreign interest like Tyson.

Local analysts have said the largest U.S. meats producer, Tyson Foods Inc. (TSN.N: Quote, Profile, Research), is looking to enter the Brazilian market with a local acquisition.

In a move to beef up its meats business, U.S. food giant Cargill bought the major Brazilian slaughterhouse Seara Alimentos in 2004 and announced investments of up to $100 million to boost its poultry and pork capacity.

Source: Reuters

18 July 2006