Value Dispute Delays J&F's Vigor Deal

10/04/2017 - 10h20

A dispute about the value of Itambé delayed the conclusion of the sale of Vigor, which belongs to the brothers Joesley and Wesley Batista, to the Mexican Lala.

The deal, which should have been closed on August 20, had to be rediscussed. The expectation, however, is that the negotiation will be completed in the next few days.

On August 3, J&F, a holding company that brings together the interests of the Batista family, announced the sale of Vigor to Lala for R$ 5.7 billion (US$ 1.7 billion).

The amount also included Itambé, a subsidiary of Vigor, in which J&F holds a 50% stake. The other half belongs to CCPR (Cooperativa de Produtores Rurais de Minas Gerais, or Cooperative of Rural Producers of Minas Gerais State).

In the offer presented by the Mexican group, Vigor was valued at approximately R$ 4.5 billion (US$ 1.4 billion), well above the value of Itambé, which was R$ 1.2 billion (US$ 375 million).

CCPR, which would receive R$ 600 million (US$ 187 million) for its share, did not agree with those figures.

People close to the cooperative said that the two companies should have practically the same value, because billing and cash generation are equivalent.

They also argued that Itambé's distribution reaches different regions of the country, including the Northeast, while Vigor is strong only in São Paulo.

The Mexican group said that Vigor has a recognized brand and portfolio of higher value-added products, such as Greek yogurt, a market leader. Itambé was said to be very focused on "commodities", such as milk powder and long-life milk.

Without a deal, CCPR announced its intention to exercise its preemptive rights and repurchase the share of J&F in Itambé. The cooperative sold 50% of Itambé to the Batista family in 2013.

Translated by MARINA DELLA VALLE

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	Zanone Fraissat/Folhapress
	Vigor belongs to the brothers Joesley and Wesley Batista