BRF SALA DE IMPRENSA

BRF ANALYZES POTENTIAL BUSINESS COMBINATION WITH MARFRIG

The new company would be an industry leader in Brazil, United States, Latin America, Middle East and Asia

30/05/2019 14h30

Today BRF signed a memorandum of understanding with Marfrig for the two companies to analyze the possibility of combining their businesses.

The will have a period of 90 days, which may be extended for another 30 days, to conduct an in-depth study and define the terms of a final agreement. The principles guiding the process are that the resulting company would have a high level of corporate governance, adopt policies for eventually obtaining an investment credit grade rating and be managed in accordance with the values of integrity, quality, safety and sustainability.

The preliminary terms do not involve any cash disbursements, but rather a share exchange that would result in the attribution of interests in the capital of the resulting company of 84.98% to BRF shareholders and 15.02% to Marfrig shareholders.

The understanding is that the two companies would complement each other in terms of market, geography and protein diversification while reducing risks. The business combination could make the new company the leader in its markets.

The transaction, if carried out, would reinforce the commitment to deleveraging and adjusting the capital structure, focusing on the Halal market, innovating, expanding the product base, expanding into international markets and maintaining a stable management model.