MBRF speeds up merger gains as global expansion advances
From left: Miguel Gularte and José Ignácio Scoseria Rey
Gabriel Reis/Valor
About a year after BRF and Marfrig completed the merger that created MBRF, one of Brazil’s largest food companies, the group is moving faster than expected on promised gains from the deal.
The merger created a company with revenue of nearly R$152 billion at the time. Since then, global meat trade has faced several disruptions: China imposed a beef quota on Brazil 35% below previous export volumes, the United States alternately introduced and removed tariffs on the product, and conflict in the Middle East disrupted trade and logistics.
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Even so, MBRF expects to reach R$1 billion in merger synergies ahead of the original 2028 target and is expanding its operations in China and the Middle East.
Merger gains
The company generated R$285 million in synergies in the first half alone, out of R$608 million expected for 2026. Given the pace of integration, the company now expects to exceed its original target, Chief Executive Miguel Gularte told Valor.
“We are ahead of schedule and [the R$1 billion figure] should actually be exceeded. In the three years or so before the merger, the two companies had already worked together in several areas, which meant our post-merger planning had a much faster ramp-up than in a normal merger environment,” he said, referring to the fact that Marfrig already controlled BRF before the transaction.
In the second quarter, MBRF completed the integration of Marfrig and BRF’s sales teams in Brazil, said José Ignácio Scoseria Rey, vice president of finance, investor relations, management and technology.
The move is considered strategic because it allows the group to offer Marfrig products to BRF customers and vice versa.
São Paulo state is one example. BRF has long had a strong presence there in chicken and pork products and is now seeking to expand in beef.
Abroad, Marfrig also had an established commercial network in Europe and the United States focused on beef. Brazilian chicken exports to the European Union remain suspended because of concerns over antimicrobial controls in Brazil, although the industry expects shipments to resume this year. MBRF began exporting pork to the United States last year, Gularte said.
“The big opportunity is to reach BRF’s 432,000 customers [354,000 of them in Brazil] with beef and achieve much broader coverage than we had with the beef sales force alone,” Scoseria said.
Middle East growth
MBRF has operated in the Middle East since the 1970s, when the business was still under Sadia, one of BRF’s brands.
The war disrupted the region, but it did not alter the company’s plans. Insecurity along traditional shipping routes and higher oil prices forced MBRF to use more expensive alternatives, while a supply agreement with Saudi agricultural investment fund Salic helped support sales and earnings. Keeping inventory in the region also proved important.
Gularte said that after outbreaks of Newcastle disease and avian influenza in Brazil began affecting exports in 2024, the company decided to hold inventory closer to its destination markets, helping safeguard supply this year.
MBRF had also been seeing stronger meat consumption and prices in the region since late 2024. Another 23 million people are expected to be added to the Middle East’s population by 2027, he said.
“We were tested on the choices we made. Tourism declined, [and that consumption] was replaced by local demand and by the space left by companies that decided not to remain in the region,” Gularte said.
Sadia Halal IPO
The war did not change the timetable for the planned initial public offering of Sadia Halal, created by MBRF and HPDC, a subsidiary of Saudi sovereign wealth fund PIF, in October 2025.
The company has selected the banks that will work on the transaction and is discussing technical issues with the Saudi regulator. The plan is to launch the IPO around mid-2027.
Listing Sadia Halal shares on the Riyadh stock exchange is expected to broaden its investor base. The company is currently valued at about six times enterprise value to Ebitda, but that multiple could approach 10 to 11 times, Scoseria said.
This year, MBRF is adding about 55,000 tonnes of production capacity in the region — 15,000 tonnes in Kezad, in the United Arab Emirates, and 40,000 tonnes at its new plant in Jeddah, Saudi Arabia.
China expansion
In China, MBRF is positioning itself to follow the country’s efforts to reduce its dependence on imported food.
Its plant in Henan province, acquired in late 2024, is operating at 80% of capacity and should reach full utilization this year, Gularte said. The facility is expected to be expanded gradually.
Debt reduction
At home, MBRF is also working to reduce debt, which stood at R$45 billion at the end of the second quarter.
Scoseria said the company has begun talks with investors about a potential international bond offering of between $500 million and $1 billion.
The proceeds would be used to repurchase bonds maturing in 2029, as the company announced Monday (Sept. 28), and to repay short-term debt.
