MBRF and Saudi fund launch Sadia Halal and plan future IPO

MBRF, the company formed from the merger between Marfrig and BRF, announced on Monday (27/10) the creation of Sadia Halal, which marks the expansion of its operational partnership with Halal Products Development Company (HPDC). HPDC is a wholly owned subsidiary of the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund.

The new unit will bring together MBRF’s factories and distribution centers located in Saudi Arabia and the United Arab Emirates, along with its distribution companies in Qatar, Kuwait, and Oman, and its direct export business of poultry, beef, and processed products for customers in the region. The assets were valued at US$2.07 billion.

The agreement’s closing is still subject to regulatory approval, but MBRF and HPDC already intend to carry out an initial public offering (IPO) for Sadia Halal.

“The expansion of the partnership with HPDC aims to strengthen MBRF’s presence in one of the most profitable and influential markets in the world, bringing our brands closer to local consumers and ensuring a permanent role in the country’s food security agenda. In addition, the operation opens the possibility for an IPO starting in 2027,” said Marcos Molina, controlling shareholder and chairman of MBRF’s board.

Largest halal poultry company in the world

The company expects the new venture to become the world’s largest halal poultry producer, while also having a presence in the beef segment. The halal market, which adheres to Islamic dietary requirements, currently accounts for 7.3% of MBRF’s sales.

“The future is promising for this company. It is a huge market. By 2027, projections indicate consumption above US$1.5 trillion,” said Fábio Mariano, MBRF’s vice president for the halal market, who will also serve as the chief executive of Sadia Halal.

The estimate also considers demographic projections showing that the Muslim population will grow at twice the rate of the global average in the coming years. Today, the world’s Muslim population is 1.9 billion people.

“In our business (poultry and beef), per capita consumption is high not only in Saudi Arabia but also in other GCC countries. This is strongly linked to demographics,” said Mariano. “The consumer base is expanding, and since we have capital to invest, we will be able to accelerate our growth plans and increase our presence locally.”

At closing, scheduled for the first quarter of next year, HPDC will hold 10% of Sadia Halal, with a plan to increase its ownership to 30% and the right to increase it to up to 40%. The increase will occur through a capital injection, split equally between primary and secondary offerings. “This strengthens the capital structure and creates a major opportunity for the IPO,” said Molina.

The Saudi view

HPDC chief executive Fahad AlNuhait confirmed the plan to raise its stake to 30%. “This move is fully aligned with Saudi Arabia’s Vision 2030 economic diversification strategy, supporting the region’s transformation into a global hub for halal products.”

The deal also includes a renewable 10-year supply agreement for poultry and beef products produced in MBRF’s Brazilian plants and destined for Sadia Halal. The company currently makes around 110,000 deliveries per month to more than 17,000 points of sale in the region.

The IPO of the new company is expected to take place in the first quarter of 2027. The Riyadh Stock Exchange is currently the fourth-largest in the world in terms of the number of IPOs.

Investor reaction appeared positive. On B3, MBRF’s common shares closed Monday up 6.32%, at R$15.98. The Ibovespa, the main index of the Brazilian stock market, rose 0.55%.

Source: Globo Rural

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