Moody's affirms Marfrig

Moody's Investors Service said it affirmed Marfrig Frigorificos e Comercio de Alimentos SA's B1 ratings and stable outlook, following the company's announcement that it is in negotiations for a number of strategic acquisitions in Argentina and Uruguay for a total consideration of $267 million.

The agency noted that Marfrig has reached an initial agreement to acquire 70.51% of the shares of Quickfood SA in Argentina and 100% of Establecimentos Colonia SA in Uruguay.

The company also announced the potential acquisition of two other companies in Argentina: Best Beef SA (Vivorata) and Estancias del Sur SA, the agency added.

"The affirmation of Marfrig's B1 rating is based on the company's already stated strategy to pursue opportunistic acquisitions following its successful IPO in July," said Moody's analyst Soummo Mukherjee.

"Although these acquisitions present integration challenges , they are positive for the rating to the extent that geographic diversification of raw material sourcing increases and the potential impact of closure of export markets due to animal disease decreases."

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