Perdigao SA and Sadia SA, Brazil announce merger

Brazilian food companies Perdigao SA and Sadia SA on Tuesday announced they will merge amid the global financial crisis, the Associated Press reported.

The stock swap deal will make the new company, called Brasil Foods SA, the largest processed foods company in Brazil and the second-largest food company behind Friboi, owned by JBS SA.

Brasil Foods will boast a combined annual revenue of $10.6 billion, a 119,000-person labor force and 42 plants. The deal is subject to regulatory approval.

Under the merger, Perdigao will control 68 percent of the company and Sadia will own 32 percent, the AP reported, citing an article in Brazilian newspaper Folha de S. Paulo.

Sadia began shopping for a buyer after losing $342 million in its fiscal third quarter primarily on foreign exchange derivatives losses and becoming laden with debt. (See Sadia eyes merger with Perdigao, Meatingplace, March 19, 2009.)