Brazil-Government to fund meat mergers.

BRAZIL-GOVERNMENT TO FUND MEAT COMPANY MERGERS.

The Brazilian National Development Bank wants to beef up its presence in mergers and acquisitions, perhaps financing a possible merger of meatpackers Perdigao (PDA) and Sadia (SDA).

Quoted by the local Estado news agency, BNDES’ Capital Markets Director Eduardo Rathfingerl said that "business consolidation is one of our priorities."

While Rathfingerl did not give any details about operations the development bank was involved in, he did say that a Perdigao-Sadia deal would present an opportunity for the BNDES.

"If it makes sense to participate, we’re going to study it. If they seek us out and the proposal is good, that would be a part of this consolidation strategy," Rathfingerl said. "But, for now, we’re not playing a part in these negotiations."

Perdigao and Sadia were in talks about a possible tie-up, but Perdigao said in March that the negotiations had ended. The Brazilian government is known to support any deal between the companies to keep Sadia in Brazilian hands.

Sadia, the former market leader, got into trouble last year due to mismanaged dollar derivatives positions, which yielded losses of more than 1 billion Brazilian reals ($458 million).

The BNDES holds the largest share portfolio in Brazil , with stakes in 186 different companies.

"We want consolidation of large groups capable of competing internationally, capable of moving forward with their strategies, capable of moving forward their investment projects," Rathfingerl said.