Marfrig Global Foods received the green light for its pending 51% stake in the National Beef Packing Company, which will result in the Brazilian firm becoming the world’s second-largest processor in terms of production capacity.
Both companies reached an agreement in April, where Marfrig paid US$969 million to acquire the National Beef Packing Company, which was financed by private bank business Rabobank with the participation of Banco Bradesco and ING.
The deal was questioned by the US Senate Committee on Agriculture, Nutrition and Forestry who wrote a letter to the Treasury Secretary Steven Mnuchin urging to investigate the acquisition.
The Senators strongly believed the acquisition had the potential to threaten the safety of the American food system.
The uncertainty of the deal was sparked after Brazil’s turbulent year in the meat industry following corruption scandals across some of Brazil’s biggest meat companies including BRF and JBS.
The most recent case was BRF, who were allegedly involved in a cover-up of salmonella in its meat products, resulting in four of its industrial plants and laboratories being placed under investigation.
Meanwhile JBS was part of one of the biggest political scandals in Brazilian history, where brothers Joesley and Wesley Barista, owners of JBS at the time, were charged with insider trading by prosecutors, who allegedly pocketed over US$30 million.
According to GlobalMeatNews’ State of the Industry report, the Brazilian meat scandal had a 6% impact on businesses around the world as key export markets began to ask questions about the supply chain. The report outlined that Brazil was the second biggest exporter in the world at $13.9 billion.