SAO PAULO--Abilio Diniz, the new chairman of Brazilian food
giant BRF-Brasil Foods SA (BRFS, BRFS3.BR), said Wednesday there's
no conflict of interest for him to remain as chairman of Brazil's
largest retail group, Grupo Pao de Acucar (PCAR4.BR, CBD), or
GPA.
BRF was created by a 2009 merger between Sadia SA and Perdigao
SA, and produces poultry, pork, beef, processed meats and
margarine, among other products. It had 61 plants in Brazil at the
end of 2012 and more in other countries, serving a total of 140
markets.
Casino Guichard-Perrachon SA (CGUSY, CO.FR), which controls GPA,
wants Mr. Diniz to resign as chairman of GPA because it sees a
potential conflict of interest with Mr. Diniz holding both
positions. BRF is a major supplier to GPA.
Mr. Diniz and Casino Chief Executive Jean-Charles Naouri have
openly clashed in recent years after Mr. Diniz attempted to back
out of a 2005 deal to hand over control of GPA, which was founded
by Mr. Diniz's family.
Jose Antonio Fay, current chief executive of BRF, will remain in
that position, Mr. Diniz said.
BRF has 65% of the Brazilian market in some segments. The
company needs to consider expanding in global markets, Mr. Diniz
said.
Analysts at Brazil's Banco Bradesco agree.
"We believe the main challenges for Abilio Diniz could be
expanding its international operations in a competitive way,
improving operating efficiencies and pursuing synergies," the bank
said in a note to investors.
Neverthless, BRF's only effort to expand abroad this year is the
construction of a plant in China in partnership with a local
company, Mr. Fay said.
Mr. Diniz said he owns a 3% stake in BRF, and he has no plans
for the time being to buy more shares in the company. He also said
he recently sold some shares in GPA.
--Jeffrey T. Lewis in Sao Paulo contributed to this article.
Write to Luciana Magalhaes at Luciana.magalhaes@dowjones.com
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