SAO PAULO, July 13, 2011 /PRNewswire/ -- The management of
BRF – Brasil Foods S.A. ("BRF" or "Company" – Bovespa: BRFS3; NYSE:
BRFS) wishes to announce, pursuant to CVM Instruction 358/02 and
Paragraph 4, Article 157 of Law 6.404/76, that the Plenary Session
of the Administrative Council for Economic Defense ("CADE") has
approved today (July 13 2011) the
Association between BRF and Sadia S.A. ("SADIA"), contingent on the
compliance with the provisions contained in the Performance
Agreement ("TCD"), also signed today.
The parties to the TCD are, on the one hand, BRF and SADIA, and
on the other, CADE, this document constituting an integral part of
the ruling given by the Plenary Session of CADE within the scope of
Concentration Act 08012.003189/2009-10.
The measures established in the TCD are limited to the Brazilian
territory, in the markets and/or categories of products specified
in the TCD, the Company and SADIA being free to operate in the
external market as a whole, and the domestic dairy product and food
service markets, conditional on these activities not representing
an impediment to the assumptions and effectiveness of the TCD.
1. Measures which must be adopted by the companies BRF and
SADIA ("Companies"):
The TCD covers the following principal measures with which the
Companies shall comply:
(a) sale of the following brands and of all other intellectual
property rights related to them: (i) Rezende, (ii) Wilson, (iii)
Texas, (iv) Tekitos, (v) Patitas,
(vi) Escolha Saudavel, (vii) Light Ellegant, (viii) Fiesta, (ix)
Freski, (x) Confianca, (xi) Doriana and (xii) Delicata.
(b) joint sale of all goods and rights related to certain
productive units (including employees, installations and
equipment), which comprises of: (i) 10 processed food plants, (ii)
02 hog slaughtering plants, (iii) 02 poultry slaughtering plants,
(iv) 04 animal feed plants, (v) 12 chicken breeder stock farms,
(vi) 02 poultry hatcheries;
(c) sale of all goods and rights related to 08 Distribution
Centers;
(d) assignment of the entire portfolio of agreements with
integrated poultry and hog outgrowers, currently used to guarantee
the specific supply of the productive structures mentioned in
letter "b", which are specified in the Attachment 1 of the TCD,
plus as many other agreements as necessary to ensure at least the
supply of 100% of the poultry and 70% of the hogs used in the
production of processed foods in the productive units sold;
(e) the portfolio of agreements referred to in letter "d"
and the combination of assets under letters "b" and "c" must
be geographically coordinated in the same manner as the operation
currently conducted by the Companies;
(f) the combination of all tangible and intangible productive
assets indicated in letters "a" "b", "c" and "d", are characterized
as a fact universality (denominated in the TCD as "Business") and
corresponds to an industrial food processing capacity amounting to
730 (seven hundred and thirty) thousand tons being 96 (ninety-six)
thousand tons of margarines, and the rest in the key markets where
there are anti-trust concerns.
(g) suspension of the use of the PERDIGAO brand in the Brazilian
territory for a period of 03 (three) years relative to the
following products: (i) cooked hams, luncheon meat; (ii) pork
festive line (frozen seasoned pork loin, smoked pork shoulder,
seasoned bone/boneless pork leg, boneless baby tender ham, pork
tender); (iii) smoked sausage and pork sausage;
(h) suspension of the use of the PERDIGAO brand in the Brazilian
territory, for a period of (four) years for the following product:
salamis;
(i) suspension of the use of the PERDIGAO brand in the Brazilian
territory for a period of 05 (five) years for the following
products: (i) lasagna; (ii) frozen pizzas; (iii) kibes and meat
balls and (iv) turkey cold cuts light line;
(j) for the period of 05 (five) years, the Companies may not use
the categories listed under letters "g", "h", "i", besides
margarine, in natura turkey, bologna sausage, poultry party kit,
hamburger, breaded products and frankfurters, other brands, already
existing or which may be created, which are not those listed in
Attachment 3 of the TCD. The use of these brands or denominations
of these products is not permitted under any shape or form. For the
brands cited in Attachment 3 in which a maximum limit for
participation is established, the verification at any time of an
infringement of this limit shall imply the definitive suspension of
the corresponding brand, for the period herein established in the
category in which this infringement has occurred.
(k) suspension of the use of the BATAVO brand for a period of 04
(four) years for the products and categories under letters "g",
"h", and "i", besides margarine, in natura turkey, bologna sausage,
poultry festive line, hamburger, breaded products and sausages;
(l) during the period the TCD is in effect, the Companies shall
refrain from signing agreements of any type with any points of
sale, including wholesale chains and retail supermarkets and
hypermarkets that imply de facto exclusivity or right of sales,
publicity or merchandising, including in relation to the manner of
display of the products at the point of sale; and
(m) with respect to turkey meat, the Companies guarantee the
supply of in natura turkey: to the purchaser of the Business, in a
volume corresponding to the market share of the brand: Rezende,
according to Nielsen volume data (2010 average) at the export sale
price of these products.
2. Conditions and timelines for complying with the
requirements under the TCD:
2.1. The purchaser of the "Business" (item 1, letter "f") shall
cumulatively and individually substantiate to CADE:
a) financial solidity, including for the realization of future
investments;
b) administrative and managerial capacity and;
c) the absence of any connection, direct or indirect, including
outside control, with the Companies or their respective economic
group.
2.2 Within a period which is compatible with other obligations
in the TCD, the Companies shall take the necessary steps to make
the "Business" ready and available for sale including, measures
necessary for corporate reorganization, release of real and
mandatory encumbrances, administrative, organizational
restructuring or any measures that may become necessary.
2.3 The said terms are defined in the confidential clauses to
the TCD.
2.4 The behavioral measures on the use of brands pursuant to
item 1, letters "g", "h", "i", "j" and "k" shall become effective
from the day subsequent to the signature of the agreement for
selling the "Business".
3. Companies' obligations during the period set for sale of
the business:
(a) maintain the productive units to be sold fully operational
and in conditions no less than those existing as of this date;
(b) replicate in the installations, productive processes and
products to be sold, improvements made in the installations,
productive processes and products which shall remain in the hands
of BRF;
(c) maintain employment levels at the said productive units, the
unjustified severance of members of the labor force being
prohibited;
(d) maintain investments in marketing of the brands to be sold
at levels at least equivalent to those made in 2010;
(e) maintain the market share of the brands involved in the
sale, this calculated in conjunction with each Nielsen category, at
least, at the same level as the Nielsen data for 2010, as cited in
Attachment 4 of the TCD. Market share on the date of sale shall be
measured on the basis of the average of the data for the Nielsen
market share (volume) for the preceding 6 months prior to the sale
of the "Business".
4. Monitoring and penalties:
4.1. CADE shall supervise compliance with the obligations
assumed by the Companies in the TCD, which also contemplates the
imposition of penalties in the event of non-compliance with its
provisions.
4.2 In order to establish the regularity of all the obligations
cited in this agreement, the Companies shall engage, at their own
expense, within 10 days of signature of the TCD, a first class
independent auditor with no restrictions on the part of the
economic regulators (CVM, BACEN and others).
5. Additional information:
The tables below aim to simulate the impacts on BRF for baseline
year 2010 of the measures contemplated in the TCD. For this
simulation it was not considered any eventual increase in sales
with the brands that will continue to be used by BRF, in
substitution for the products under the Perdigao and Batavo brands
with their sales temporarily suspended in the light of CADE's
decision in specific categories defined in item 1, letters (g),
(h), (i) , and (k).
Consolidated data
2010
|
DIVESTMENT
|
BRANDS
SUSPENDED
|
TOTAL
IMPACT
|
|
TCD - Volume thousand
tons
|
456
|
246
|
702
|
|
In-Natura
|
52
|
2
|
54
|
|
Elaborated +
Processed
|
341
|
241
|
582
|
|
Commemorative
Products
|
12
|
2
|
15
|
|
Margarines
|
51
|
0
|
51
|
|
Total Volume BRF
Pre-TCD
|
|
|
6,062
|
|
TCD as a % of Total BRF
Pre-TCD
|
|
|
11.6%
|
|
TCD - ROL MMR$
|
1,726
|
1,241
|
2,967
|
|
In-Natura
|
221
|
7
|
227
|
|
Elaborated +
Processed
|
1,275
|
1,213
|
2,488
|
|
Commemorative
Products
|
70
|
21
|
91
|
|
Margarines
|
161
|
0
|
161
|
|
NOR Total BRF
Pre-TCD
|
|
|
22,681
|
|
TCD as a % of Total BRF
Pre-TCD
|
|
|
13.1%
|
|
|
|
|
|
The Perdigao brand, as well as all the rights associated to it,
remains the property of BRF and used normally in various categories
of processed foods such as breaded products, hamburgers, bologna
sausage, fresh sausages, frozen ready to eat meals (except
lasagna), bacon, festive poultry line as well as the entire line of
in natura products, among others. The volume subject to the
restriction of the TCD would represent in 2010 about one third of
the sales of the total Perdigao brand.
Finally in relation to the assets to be sold, BRF undertakes to
maintain the quality of its products and supplies to the points of
sale until the transition to the new owners is concluded.
With respect to the employees and integrate outgrowers who
attend the units required by CADE to be sold, BRF shall adopt all
possible measures for minimizing the impacts arising from the
change in the control of these assets. The TCD establishes the
obligation on the part of the purchaser of the assets to be sold to
maintain the current level of employment for at least six
months.
Going forward, the Company shall work towards concluding the
merger plan for the two companies, thus creating the necessary
conditions for making BRF a global leader in the food sector.
Sao Paulo, July 13 2011
Jose Antonio do Prado Fay
Chief Executive Officer
Leopoldo Viriato
Saboya
Chief Financial, Administration and Investor Relations Director
SOURCE BRF - Brasil Foods S.A.