BRF strengthens Oman operation with AFK stake
AFK is a distributor of frozen and processed food items which includes poultry, beef, prawns and mutton. BRF already owns roughly 40% of the company’s shares but plans to acquire the remaining portion of the business to strengthen its grip in the Sultanate of Oman.
The Brazilian processor’s BRF GmbH arm announced its intention to “hold the totality of AKF’s economic interest” – which essentially means it plans to acquire full operational control of the Omani firm.
Within the context of the transaction, BRF said it valued AFK at around $64m in a statement on Monday 25 April.
The business still needs to satisfy conditions pertaining to competition regulation in the Sultanate of Oman to complete the takeover of the frozen food distributor, which can take several weeks to process.
Middle East expansion
“The transaction is in line with BRF’s strategic plan for globalising the company, accessing local markets, strengthening BRF’s brands, distribution and expansion of its product portfolio around the globe,” the company’s financial team said in a statement to investors.
BRF also said that the acquisition of AFK will not trigger withdrawal rights for its shareholders as the shares have liquidity and are dispersed in accordance with Brazilian corporate law.
AFK has been partially owned by BRF since 2014 when the company bought a 40% stake in the business, then valued at $68.5m. In a statement published at the time from BRF, the company said it would look to acquire the remaining ownership of AFK within 36-90 months from the point on the initial acquisition.
The reason BRF did not choose to complete a full takeover of AFK in the first instance is because the company wanted to assess “the future performance of AKF, in accordance with the local regulation”.
