Brazil’s Minerva Foods is set to continue its local spending spree, with suggestions it is in early stage talks to buy Australia’s second-largest meat processor in a deal that could be worth close to $2bn.
Fresh from buying Australian Lamb Co for $400m, sources say Brazil’s second-largest meat company is negotiating with Cargill and Teys to buy their Australian meat-processing joint venture.
The family-owned Teys Australia has a 50-50 beef processing and cattle feeding arrangement with Cargill Beef Australia.
The pair operate meat-processing facilities in Queensland, NSW and South Australia.
Sources say a possible sale is being driven by Teys, but Cargill’s commitment extends to the Teys family and it would also exit if it is no longer a shareholder.
Minerva Australia is run by Iain Mars, the former Australian boss of its Brazilian rival JBS, the largest meat-processing company in the world.
Minerva receives financial backing from Saudi Arabia.
The Saudi Agricultural and Livestock Investment Company, a business of Saudi Arabia’s sovereign wealth fund, partnered with Minerva to buy Australian Lamb Co in recent weeks.
In past years, Minerva’s turnover has been around $8bn.
Cargill provides food, agricultural, financial and industrial products around the world, and a departure from Australia would be a significant move.
The US-based investor has had a presence in Australia for some time, earlier owning assets with the country’s largest grain handler, GrainCorp.
The Teys family have been in the Australian meat industry since the 1946 when their first butcher shop was opened in Queensland.
They expanded into meat processing in the next decade.
Executive chairman Brad Teys became the third-generation family chief executive in 2002.
The company entered a joint venture with Cargill in 2011 and Mr Teys reportedly stepped down as chief executive last year.
Latest data from IBISWorld suggests that the Teys Australian meat-processing joint venture with Cargill generates about $2.4bn in annual revenue, growing at a rate of 0.9 per cent, with $1.1bn worth of assets, growing at 6.4 per cent between 2017 and 2021.
Annual net profit was last recorded at $38.5m, according to IBISWorld. In 2021 the company generated $2.4bn of annual revenue.
The interest in beef assets comes after JBS last year purchased Huon Aquaculture and Canada’s Cooke this year bought the country’s largest salmon producer, Tassal.
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