Brazilian food processing companies Perdigao (PDA) and Sadia (SDA) have announced plans of a merger, making Brazil the largest poultry producer in the world in market value surpassing Tyson Foods. PDA is the stronger of the two and the one "forced " by the government to bailout the balance sheet of the impaired SDA.
The new company will be called BRF-Brasil Foods SA and boast $11 billion in annual revenue.
SDA reported its first loss in 65 years on wrong-way currency bets, and both companies have faced overall demand dropping from fears of a swine flu pandemic. They plan to tap into other markets, and are already a step closer to China with a new deal Tuesday allowing direct imports from Brazil for the first time.
Synergies from the firms abounds, and there is interest by the government in making sure this is a leading global company.
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