Senate members worried about Marfrig-National Beef deal
The acquisition of National Beef by the Marfrig Global Foods Brazil is under fire in the US Senate where 4 members are asking for a review by the Committee on Foreign Investment in the United States (CFIUS).
"The security, safety, and resiliency of our food system is integral to the overall security of our nation.
In light of recent acquisitions of U.S. food and agriculture companies such as Smithfield by Shuanghui in 2013 and the acquisition of Syngenta by ChemChina in 2016, it has become increasingly clear that growing foreign investment in U.S. agriculture requires a thorough review process to safeguard the American food system.", wrote senators from Iowa, Ohio and Michigan to the Treasury Secretary Steve Mnuchin.
The deal worth $969 million could transform Marfrig Global Foods in the second largest beef processor in the world. The transaction is valued at $2.3 billion, including the debts, according to the statement released by Marfrig. Rumours about the transaction have started in January when sources inside National Beef mentioned that Leucadia, the majority stakeholder (79%), is considering selling a part or all of its stakes in what is considered to be one of the biggest units in the meat-processing industry from North-America.
National Beef Packing Co. is ranked as the fourth-largest U.S. beef processor behind Tyson Foods Inc., JBS SA and Cargill Inc.
The deal was announced on April 9th and follows a 2017 corruption scandal regarding breaches in Brazil's food safety system that allowed the companies to export poor quality meat to global markets, including the US. As a result, US authorities have halted imports of fresh beef from Brazil.
The Senators also asked the Treasury Department to include both the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) in CFIUS reviews of foreign acquisitions of major U.S. agriculture assets, informs Drovers magazine.
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