The merger between Marfrig () and BRF () has already been completed: September 22, according to a joint statement released by the two companies on Monday (8). The next day, on September 23, the company’s new action, which will have Ticker MBRF3, will be negotiated on the stock exchange.
Last week, the Court of the Administrative Council for Economic Defense (Cade) had already given the unanimous and unrestricted decision. Now that the process is about to finalize and the new action listing has a date, the question is: what to expect from the newest food giant?
What analysts say
Goldman Sachs estimates that the resulting company will have a market value of US $ 5.1 billion and revenue of US $ 27.8 billion (last 12 months), with a 44% geographical exposure in the US and 27% in Latin America. The portfolio brings together strong brands such as Sadia, Perdigão, Montana, Bassi, Black Canyon and Premium Iowa.
The global financial institution mentioned in a report that “MBRF should operate with a 2.9x pro-form leverage and negotiate at 5.9x EV/EBITDA (company value before interest, taxes, depreciation and amortizations) for the next 12 months, according to Bank (IFRS estimates and before synergies)”.
Leverage is the relationship between debt and cash generation; EV/EBITDA is a multiple used to evaluate companies; IFRS is an international standard that standardizes results dissemination; Already the synergy refers to the benefits that arise when two companies come together.
The house has a purchase recommendation for Marfrig shares, with a target price of 12 months of R $ 26.50, and has no recommendation for BRF shares.
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Bradesco BBI, on the other hand, pointed out that Cade’s approval eliminated uncertainties about the fusion. Now, investors’ attention should turn to the delivery of synergies
They are “R $ 805 million in annual economies (R $ 485 million cross-selling and supply chain, R $ 320 million administrative expenses) and a tax NPV of R $ 3 billion-which remain as the main value generation engine in the new company,” said the bank, who maintains a neutral recommendation while waiting for “greater clarity on the rhythm and the scale of accomplishment”. NPV is the net present value of tax benefits that the company expects to obtain in the future.
Like Bradesco BBI, Santander maintained the neutral classification for the paper. The bank mentioned that, despite increasing diversification, there is “high leverage implicit after the closing of the business.”
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Right of withdrawal, replacement and dividends
In the joint statement, Marfrig and BRF reported that some shareholders exercised the right to withdrawal – a mechanism provided for in the law that gives the minority investor the option of leaving the company and receiving the value of their shares back when it does not agree with operations such as mergers or incorporations.
In total, shareholders holding 9.98 million BRF common shares and only 5 common shares of Marfig opted for this exit, resulting in a reimbursement value of R $ 198.5 million for BRF and R $ 16.60 for Marfrig.
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Companies also defined the exchange ratio: each BRF action will be replaced by Marfrig’s 0.8521 action. In addition, they announced the payment of dividends of R $ 2.3 billion by Marfrig (R $ 2.81 per share, Yield of 12.4%) and R $ 3.3 billion for BRF (R $ 2.07 per share, Yield of 11.0%).
For the crop, the closure of the operation is in line with expectations, and low adherence to the exercise of the right of withdrawal is marginally positive news. “We maintain recommendation for outperform For and, since the merger must further strengthen the company and unlock value through synergies. ”
