Singapore-based SATS’ subsidiary, Singapore Food Industries (SFI) and BRF have set up a joint venture (JV) company in Singapore to process meat and manufacture branded food products for distribution to retailers, restaurants, wholesalers, distributors and ship chandlers.
The new company SATS BRF Food will have an issued and paid up share capital of S$48 million (US$35.6 million) consisting of 48 million ordinary shares of S$1 each.
SFI will hold 24.48 million ordinary shares while BRF GmbH will hold 23.52 million, representing 51% and 49% equity stakes respectively.
The new will be classified as an investment in JV by SATS.
Subject to the fulfillment of certain conditions precedent, including the receipt of approvals from the relevant regulatory authorities, completion of the transaction is expected to take place on May 15, 2015.
Under the terms of the joint venture agreement, SFI will first transfer its food distribution business to SATS BRF Food, in exchange for 100% of the shares in the capital of the JV company.
In addition to the business transfer, SFI will grant a license for the use of certain brands and trademarks in Singapore and along with its subsidiaries grant a sublease of two meat processing plants and a warehouse to SATS BRF Food.
BRF is the world’s seventh largest food company by revenue and Brazil’s leading producer of meat products.
It is a key supplier to SATS, which in turn is also one of its largest customers in Singapore.
The formation of SATS BRF Food will create a food distribution and meat processing business with enhanced scale and higher productivity.
The JV company intends to grow its portfolio of branded food products for the Singapore market and to expand into other Southeast Asian markets over time.
