BRF snaps up Qatari distributor for $140m
QNIE has distributed BRF’s products in Qatar for several decades, according to the Brazilian company. This acquisition is the latest in a string of regional buys by BRF, which does a significant proportion of its business with the Middle East.
40-year distribution partnership
“BRF... announces that it has signed a binding memorandum of understanding with Qatar National Import and Export Co. for the acquisition of a part of QNIE’s frozen distribution business in the State of Qatar. QNIE has been BRF’s distributor in the State of Qatar for over 40 years,” said Augusto Ribeiro Junior, vice chief financial officer and head of investor relations for BRF, in a statement.
“This transaction is in line with BRF’s strategic plan of globalisation, accessing local markets, strengthening BRF’s brands, distribution and expansion of its product portfolio around the globe,” he added.
The QNIE deal will be BRF’s first publically disclosed Middle East acquisition so far this year, after a busy 2014. Last year saw BRF open its new US$160m factory in Abu Dhabi’s Kizad, an operation that could see 1,700 people employed by 2017, up from 350 at startup, and with a total production capacity of 70,000 tonnes a year for processed food products including pizzas, breaded products and hamburgers.
Plenty of acquisitions, but market wobbles
Last November BRF finalised the purchase of a 75% stake in Alyasra Food, the firm’s Kuwaiti distributor for US$160. The company also went after its Omani distributor of 25 years, sealing a deal to buy a 40% stake in Al Khan Foods for a reported US$68.5m in July 2014.
While BRF is bullish about its Middle East prospects, the wider markets have become increasingly concerned about the health of the Brazilian business, which missed its forecast earnings by almost 40% in its most recent quarterly results. Financial media reported BRF’s share price had fallen more than 27% in the past 12 months.
Financial analysts gave the firm a mixed set of ratings this month, with Goldman Sachs rating the firm “sell”, down from “neutral”, and Zachs going from “buy” to “hold”. But analysts from Citigroup upgraded the company, rating it “buy”, up from “neutral”.
