US beef industry urges Marfrig/National Beef investigation
Marfrig acquired a further 31% of the business from Jefferies Financial Group, bringing its ownership to 81.7%, prompting the USCA appeal to the Committee on Foreign Investment in the United States (CIFUS).
The USCA’s main issue is that a US-based company will be mostly owned by a Brazilian business. In a letter to the CIFUS, it expressed concern over recent investigations into Marfrig’s financial affairs and that “near ownership investment of an US-based meatpacking company by a foreign corporation threatens national security interests by unnecessarily risking the safety of our nation’s food supply”.
“Brazil has proven time and time again to wholly reject the food safety standards that U.S. regulators have put in place to ensure not only the health of the domestic livestock herd, but also the safety of its citizens.”
USCA President Kenny Graner said: “Today, nearly 30 million acres of US agricultural land is held by foreign investors. Once Americans lose out on that capacity - whether it be land, feedlots, meat processing facilities, or other resources - it may be that we will never have the opportunity to buy it back. In short, the growing trend of foreign interests acquiring US agricultural resources jeopardizes the ability of our nation to feed itself. In our view, this is a direct threat to our democracy.
“We urge Secretary Mnuchin and the Committee on Foreign Investment in the United States to fulfill President Donald Trump's campaign promise to put America first by ensuring the long-term sustainability of America's farming and ranching families.”
Marfrig acquired the additional 31% from Jefferies Financial Group for $860m in November. The transaction was completed earlier this week. When the sale was first announced, Jefferies CEO Rich Handler, and president Brian Friedman said: “With this sale, we bring to a close Jefferies’ incredibly successful investment in National Beef. Having initially invested $868m to acquire 79% of National Beef eight years ago, we persevered during National Beef’s severe downturn and were rewarded with strong cash distributions from operations, and now the sale of our remaining interest. We will have realized an aggregate of almost $3bn in cash, or 3.3 times our original investment in National Beef.”
