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Proposed Keystone Foods deal gets South Korean approval

Marfrig Global Foods says sale of Keystone Foods to Tyson Foods should be finalized before the end of 2018

Marfrig Global Foods' proposed sale of its Keystone Foods subsidiary to Tyson Foods has received approval from the antitrust authority of South Korea, paving the way for the transaction to close soon.

Marfrig announced the approval from South Korea in a notice to the market on its website. The company further stated that with that approval, the Brazil-based company expects the transaction to close before the end of 2018.

While announcing the financial results of the third quarter of its 2018 fiscal year earlier in November, Marfrig Global Foods stated that the proposed deal had already been approved by the antitrust authorities in the United States, Japan and China, as well as gaining approval from major shareholder BNDESPAR, the investment arm of Banco Nacional de Desenvolvimento Economico e Social -BNDES.

Marfrig is headquartered in Brazil, while its subsidiary Keystone Foods, as well as Tyson Foods, are headquartered in the United States. However, because of the international presence of Keystone Foods, approval must be given by other antitrust agencies.

In August, Tyson Foods announced that it had reached an agreement to purchase Keystone Foods, the tenth largest broiler company in the United States, from Marfrig Global Foods, for $2.16 billion in cash. Under the agreement, Tyson Foods would acquire six Keystone Foods processing plants and an innovation center in the United States, as well as eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia. The U.S. facilities are located in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin.

Marfrig Global Foods announced in April its decision to divest of Keystone Foods to leverage its acquisition of the U.S. business, National Beef Packing Company, and also to allow the company to more fully concentrate on its beef operations. The National Beef transaction was finalized on June 6.