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Minerva Takes Over BRF Beef Operation

04 November 2013

BRAZIL - Brazilian beef processor Minerva is to acquire the beef assets of BRF.

The assets include the slaughtering and deboning operations owned by BRF in the plants of Várzea Grande and Mirassol D‘Oeste, both located in the state of Mato Grosso, with a combined slaughtering capacity of 2,600 head a day and net revenue estimated at R$1.2 billion in 2012.

The Investment Agreement establishes that the plants will be acquired through the merger of shares of a pre-operational company controlled by BRF ("Newco Divisão de Bovinos"), which, in turn, will hold the assets after they are transferred by BRF.

As a result, Newco Divisão de Bovinos will become a wholly-owned subsidiary of Minerva.

BRF, in turn, will receive 29 million new shares issued by Minerva (BEEF3).

Following the deal and the capital increase, BRF will hold 16.8 per cent of Minerva‘s total outstanding shares, or 15.2 per cent after the conversion of allconvertible debentures issued by the Company in June 2011.

A supply agreement of industrial beef was also established between Minerva and BRF, and will become fully effective, after the conclusion of the transaction, ensuring the placement of part of the production of the acquired assets.

The implementation of the Transaction is subject to approval by CADE, Brazil‘s antitrust authority, after which it will be submitted to the approval of Minerva‘s shareholders‘ meeting.

Minerva said that the conclusion of the deal represents another important step in Minerva‘s investment plan by safesaver"' type="#_x0000_t75" alt="Description: http://cdncache-a.akamaihd.net/items/it/img/arrow-10x10.png" o:button="t" href="http://ri.minervafoods.com/minerva2012/web/conteudo_en.asp?idioma=1&tipo=40419&conta=44&id=183886" o:spid="_x0000_i1025"> , based on a strategy of geographical diversification and a focus on generating value for its shareholders, financial discipline and the continuation of the Company‘s deleveraging process.

With this transaction, Minerva will start to operate in the state of Mato Grosso and will raise its slaughtering capacity to 14,080 head a day, 23 per cent higher than Minerva‘s current capacity.

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