11/01/2007 14h58

Perdigão anticipates the sector merger tendency

Gazeta Mercantil – 11/01/2007

The merger of Perdigão S.A. and Eleva Alimentos is pointed by market analysts as a movement that will become common in the Brazilian agribusiness: market concentration. The bovine cold storage houses had already developed such purchase appetite, as well as the sugar and alcohol plants - both segments that had gone public. Other branches of the segment are now also seeking to gain economies of scale and become giants in order to compete in the international market. The purchase - in the value of R$ 1.7 billion (US$ 977 million) - will be financed by means of Perdigão's capital growth and may not increase significantly the indebtedness of the company. Yesterday, the presidents of both companies detailed the operation. Out of the total of the business, only R$ 773.4 million (US$ 444.5 million) will be paid in cash and the remaining balance will undergo by a merger of shares. Perdigão will acquire 46.23% of the securities of the majority and minority shareholders upon the issuance of 20 million primary shares. The remainder will be paid with the issuance of other 20 million shares, which will be traded - the shareholders of Eleva Alimentos will have 7.4% of Perdigão's capital and will become the third major holder - behind the Previ (14.16%) and Petros (10.87%) funds. Nildemar Secches, Perdigão's CEO, explains that the first issuance will take place as soon as the Brazilian Securities and Exchange Commission (CVM) authorizes it; and the second one, in the beginning of the coming year.