RIYADH: The Kingdom’s sovereign wealth fund-owned Saudi Agricultural and Livestock Investment Co. and South American firm Marfrig Global Foods SA have committed to buying shares in a potential new offering worth $900 million by BRF SA, Brazil’s biggest poultry producer.
BRF said in a bourse filing that SALIC offered to subscribe to 50 percent of the total offer or 500 million new shares.
Marfrig Global Foods SA, which owns 33 percent of BRF, pledged to buy the remaining 250 million shares, reported Reuters.
Under the terms of the proposed transaction, the offer must be priced at no more than 9 reais ($1.8) per share, which would represent a 23.8 percent premium over its closing price of 7.27 reais on Tuesday, BRF said in a securities filing.
BRF’s board of directors has already approved engaging a financial adviser to analyze the move.
The poultry producer’s shares surged as much as 15.7 percent, making it the top gainer on Brazil’s benchmark stock index Bovespa while Marfrig stock rose around 5 percent.
The Kingdom has been keen to empower its food security while playing a significant role in global agricultural and livestock supply.
Such investments hold strategic significance for the Kingdom, considering its substantial demand for Brazilian meat products.
Moreover, BRF and PIF-owned SALIC signed a memorandum of understanding last year to establish a joint venture focused on chicken production in Saudi Arabia, further strengthening their collaboration in the poultry sector.
Furthermore, SALIC holds a significant 33.83 percent ownership stake in Minerva Foods, a prominent Brazilian meat company, underscoring the significance of foreign investments in ensuring global food security.