Australian Lamb Company on the menu for Minerva Foods

Australian Lamb exports to more than 70 countries.

Victoria-based lamb producer Australian Lamb Company Group is believed to be in final negotiations for a sale to Brazil’s Minerva Foods.

Minerva sells fresh meat and operates in live cattle and meat processing.

It is the second-largest beef company in Brazil and Uruguay and the largest beef exporter in Paraguay, Colombia and Argentina, selling its products to more than 100 countries.

Australian Lamb put itself up for sale recently to capitalise on the soaring global demand for protein.

It is a large supplier of lamb to supermarket giant Coles, which also has its own branded product.

Australian Lamb exports to more than 70 countries.

Its customers include hotels, resorts, restaurants, supermarkets and butchers that purchase from the company’s two licensed facilities in Sunshine, Melbourne and Colac in southwest Victoria.

PwC is understood to be working on the sale.

Minerva is expected to pay between $350m and $400m for the business.

The Verrall family own the business, which is run by John Verrall and Denis Zarpellon and has more than 800 staff.

Australian Lamb own brands including Ambassador, Sovereign, 1788 and Everdene Oak.

For the year to June 2021, it generated about $21m of annual earnings before interest, tax, depreciation and amortisation and about $430m of revenue.

However, earnings fell about 26 per cent in the year due to the impact of the pandemic.

Companies selling protein sources are in demand around the world as the conflict in Ukraine with Russia creates food shortages.

IBISWorld says the Australian meat processing industry as a whole generates $23.5bn of annual revenue and $1.2bn of profit, with a 5.1 per cent profit margin.

Lamb and mutton account for about 24 per cent of the market.

Over the past five years, rising export demand has driven up prices.

Minerva is not the only Brazilian group that has been buying up in Australia, with rival JBS, the owner of Primo smallgoods, recently acquiring salmon producer Huon.

The sale was followed by a move by Canadian seafood giant Cooke on seafood producer Tassal.

It bid $4.85 per share and amassed a stake of more than 10 per cent in the business.

The listed company reports its results on Tuesday, and no doubt Cooke will be paying close attention.

There were suggestions that Cooke might have been contemplating a higher offer in recent days, after its bid – which valued the target at more than $1bn – was rejected. But depending on Tassal’s results, it may have left its move too late.

The stock rallied on Friday, closing at $4.93 after ending at $4.85 in the previous trading session.