Vall Companys, a family-run group of agrifood producers in Spain, is one of the leading agri-food companies. The portfolio includes 2186 farms which produce approximately 453,000 tons of pig and 170,000 tonnes of chicken per year.
The deal between the two companies was completed on 15th March 2023 and is for an undisclosed sum. It comes as part a plan to increase production both in its internal and external markets. Vall Companys is currently preparing a small capital increase. However, if this deal proves successful, and lasts, then it could be able reach up to 32.778% Master Agroindustrial share capital.
Kuster Machado Advogados advised Master Agroindustrial. Vall Companys was advised by Demarest Abogados, Rebes Ferrer and Demarest.
Lawyer Monthly was privileged to interview Juliana Goetzke de Almeida. She is the Head of Corporate and tax Dpt. Kuster Machado Advogados’ Managing Partner for the Sao Paulo Offices, Juliana Goetzke de Almeida, gives us more insight on this transaction.
What is the history of this deal? And what role did your team play in it.
All parties were eager to reach a long-term investment and integration agreement. The legal teams were faced with challenging deadlines, which could have made negotiations more difficult. However, the end result was positive as all professionals managed to create a respectful, collaborative, and efficient working environment.
This was also the first exponential M&A by Master Agroindustrial. The business cultures, tax laws and legal realities in Brazil and Spain are very different. Our team was able to translate the main concerns of shareholders to Vall Companys, and vice versa. This was due to our team’s expertise in M&A, agrobusiness, and market-related issues, and their deep knowledge of Master Agroindustrial activities. These factors helped to facilitate negotiations and design a structure that suited the objectives of both companies.
What were the challenges you faced during the transaction and how did you overcome them?
The whole process, from negotiation to closure, lasted just a few short months. As multiple meetings and discussions took place simultaneously, this scenario tested negotiation and analytical skills, decision-making abilities, emotional control, and interpersonal skills. This scenario tested negotiation skills, fast analytical analysis, decision-making ability, emotional control and interpersonal skills as multiple meetings and discussions were being carried out simultaneously.
Knowing the client’s business, culture, and situation proved to be a valuable asset in negotiations. It also provided assurance to clients throughout the entire process. M&A deals are known to be stressful and grueling for the administration, and this transaction was no different. It was important to encourage and provide a collaborative, reliable environment. Any lawyer involved in these transactions must have as their main objective to facilitate a successful agreement, not to create disputes. To accomplish this, lawyers should always negotiate respectfully and professionally. Negotiations during the M&A process can set the tone for future encounters, and even hinder future business relationships.
What is the impact of the transaction on Master Agroindustrial?
By 2028, the global market for pork is estimated to be worth approximately $250 billion. Brazil is one of the top exporters in this market. In recent years, M&A activity in Brazil has increased across all submarkets related to pork.
The merger between Master Agroindustrial and Vall Companys brings together two large corporations that are joining forces to improve their global position. The main goal of this transaction is to facilitate operational collaboration by exchanging expertise in order to maximize production, optimize the capacity of facilities, improve the deboning and slaughtering of pigs, and advance international commercialisation. The collaboration is a significant turning point for the two companies as they will be able to expand their presence on foreign markets (China, Korea, and other Asian markets).