MBRF, Saudi fund expand halal food venture
$2B deal paves way for 2027 Riyadh listing
28 October 2025
1 minute read
By: Brazilian food producer MBRF has signed an investment deal with Saudi Arabia's Halal Products Development Company (HPDC) to boost their joint venture in the Middle East, which it later plans to list in Riyadh, it said on Monday according to Reuters.
MBRF shares rose 9.25% to 16.42 reais in late morning trading on the deal's announcement.
A wholly owned MBRF subsidiary will contribute assets worth $2.07 billion to the venture, a securities filing said referring to distribution and production facilities in Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, and Oman.
MBRF, which was formed from the recent merger of pork and poultry processor BRF and beef producer Marfrig, said that under the deal HPDC will hold 10% of BRF Arabia, the investment vehicle for the joint venture.
HPDC, a subsidiary of Saudi Arabia's Public Investment Fund, has plans to raise its stake to 30% in the joint venture and has the right to increase it to 40% if certain conditions are met, MBRF's filing said.
Genial analyst Igor Guedes said the transaction is positive for MBRF because it implies an immediate capital injection and a potential future one if the 2027 IPO occurs, helping MBRF lower its leverage.
Bank of America in a note to clients said: "We believe the deal is positive and supports further growth of MBRF in the Middle East."
However, BoFa analysts reiterated their neutral rating on the MBRF stock, citing pressured US beef margins, peak margins for the company's poultry and pork business and high leverage as short-term challenges.
Explaining plans to list the joint venture's shares in Saudi Arabia, MBRF's controlling shareholder Marcos Molina told a press conference that the multiples of companies traded at the Riyadh stock exchange are among the highest in the world.
Its biggest rival JBS listed shares on the New York Stock Exchange earlier this year to access a wider pool of investors and reduce its cost of capital.
MBRF plans to obtain all regulatory approvals for the transaction by the first quarter of 2026. If all goes to plan, the IPO of BRF Arabia, to be renamed Sadia Halal at the closing of the transaction, is expected to take place in 2027, MBRF said.
