It’s nonetheless too early to speak concerning the merger between Marfrig and BRF, even after the CEO change

despite the election of Miguel de Souza Gularteformer president of Marfrig (MRFG3), for the position of CEO of BRF (BRFS3), it is still too early to talk about a possible Fusion among the companies, says José Cassiolato, partner at Nexgen Capital.

In a note, BRF itself stated that the appointment of Gularte as president does not indicate an intention, at this time, to merge with Marfrig.

In the analysis of Activate Investmentsthe change in command does not draw attention because of the hope of the merger, but because it opens a new path to leadership in the sector, in addition to taking excess liquidity from BRF shares (“overhang”).

Ativa sees the arrival of the new president as positive for the company’s roles, since Gularte has experience in the sector and full alignment with the main shareholder — Marfrig. Currently, Marfrig owns 33.27% of BRF.

The CEO change was already awaited by the market since Marcos Molinafounder of Marfrig, increased its stake in BRF in order to diversify capital into segments that can complement each other, to achieve interesting synergies for the sector.

According to consensus of Bloomberg46% of investment brokers recommend the purchase of BRFS3, and the other 33% indicate keeping the shares.

What to expect from BRF’s new CEO?

Ativa’s analysts say that the challenges are not small for the new CEO of BRF, such as margin improvement, market share (relevance to competitors) in domestic processed products and reduction of the company’s leverage.

Cassiolato, from Nexgen, also reinforces that the continuity of volatility in the price of grains and commodities agricultural products, and the large exposure to the dollar are the main risks for the company.

However, experts say that BRF has a positive outlook ahead.

In the presence of market share of BRF in Brazil and the possibilities of passing on the price increase to consumers weigh on the positive side.

The Nexgen partner recalls that the refrigerators it is operated by large companies, and BRF alone has a market capitalization of R$23 billion, followed by Marfrig with R$13 billion.

Source: Money Times