BRF Brasil Foods SA, Latin America's largest poultry processor, said it will pay BRR 2.34 billion ($1.27 billion) to buy out minority shareholders in Sadia SA in an all-stock transaction, according to Bloomberg.

Non-controlling Sadia shareholder will receive 0.132998 share of Brasil Foods for each common or preferred stock they hold, Brasil Foods has said in a statement to Brazil's securities regulator. Brasil Foods will issue 59.39 million new shares to swap for the Sadia stock it has not already acquired.

Brasil Foods, formerly known as Perdigão SA, agreed to acquire its smaller rival after Sadia booked more than BRR 3 billion in derivatives losses. Brasil Foods said on 8 July that it acquired 88 per cent of Sadia's common shares in an all-stock exchange worth BRR 1.48 billion. Each controlling stock was swapped for 0.166247 share of Brasil Foods.

Brasil Foods fell 43 centavos, or one per cent, to BRR 40.97 at 12:06 yesterday in Sao Paulo trading, reports Bloomberg. The stock has gained 38 per cent this year, less than the 49 per cent increase for Brazil's benchmark Bovespa index.