A 5.85 billion real ($2.73 billion) deal between JBS and
Marfrig, agreed in early June, illustrated the contrasting
fortunes of the two Brazilian meatpackers. Though nobody in
Brazil's beef sector has it easy, JBS had been growing and had
ratings upgrades, while others have been lowered as they face
debt challenges. Marfrig made a big step to clear up its debt
burden with the sale of the Seara Alimentos poultry and pork
unit to JBS, done entirely in assumed debt. The less-levered
Marfrig will now focus on its beef operations. The debt assumed
in the transaction included maturities from 2013 to 2017, and
is split roughly evenly between dollars and reais. JBS should
nevertheless tread with care. It picked up quality assets that
firmly established it in the white meats business, following a
200 million real purchase in May of pork and...
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