Marfrig buys controlling stake in Zenda

Marfrig failed in an attempt to buy or merge with Bertin earlier this year, which would have given them access to Bracol, the groups tanning division.

Zenda Leather, which was wholly owned by the Branaa family process 7,000 bovine hides a day across their three tanneries in Uruguay, Argentina and South Africa. They specialise in automotive, aircraft and furniture upholstery leathers. The plants also include cutting and sewing operations. In 2008 the group had a turnover of $177 million.

In a separate development Marfrig's board authorised hiring a Banco Bradesco SA unit to manage the sale of as many as 232 million voting shares, almost doubling its current 267.9 million, the Sao Paulo-based company said on September 22 in a statement. Marfrig will boost its global cattle-slaughtering capacity by 8,800 animals a day to 30,150, and will lease 11 units from Brazilian meatpackers Frigorificos Margen SA and Mercosul SA.

Marfrig will boost capacity by 41% and may sell as much as 4.08 billion reais ($2.3 billion) worth of stock as it vies with JBS to win market share. Last week, Marfrig also agreed to buy Cargill Inc.'s Brazilian poultry and pork business for $706.2 million in cash, a month after talks to merge with Bertin failed. The meatpacker, who have sought to diversify its revenue sources through acquisitions in previous years, will turn into the country's biggest poultry processor after BRF Brasil Foods SA. Buying Zenda Leather is seen as part of the Marfrig's diversification strategy.

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