BRF: Announcement to the Market

                       BRF: Announcement to the Market

PR Newswire

SAO PAULO, Nov. 1, 2013

SAO PAULO, Nov. 1, 2013 /PRNewswire/ -- In accordance with article 157, clause
4, of Act N^o 6.404, of December 15, 1976, as amended ("S.A. Act"), and
article 2 ^ of the Brazilian Securities and Exchange Commission (CVM)
Instruction N^o 358, of January 3, 2002, BRF S.A. ("BRF"), one of the largest
food companies in the world, with operations in the beef, pork, poultry,
processed foods and dairy segments, informs its shareholders and the market as
a whole that an investment agreement ("Investment Agreement") was signed on
this date by BRF and Minerva S.A. ("Minerva"), one of the leading companies in
South America in the production and sale of fresh meat, live cattle and
by-products, and by VDQ Holdings S.A. ("VDQ"), Minerva´s controlling
shareholder. This Investment Agreement regulates the terms and conditions of
an operation through which BRF will allocate its beef slaughtering plants in
Varzea Grande and Mirassol, with slaughtering capacity of 2,600 (two thousand
six hundred) head of cattle per day, as well as the BRF employees involved in
these activities ("Newco Beef Division"), to a closed capital company that
will be incorporated within Minerva, with the subsequent increase in Minerva´s
capital stock ("Operation"). This beef operation of BRF represented
approximately R$ 1.2 billion in net revenues in 2012.


Following the consummation of the Operation, the Newco Beef Division will
become an integral subsidiary of Minerva and BRF will then hold 29,000,000
(twenty nine million) shares from the new issue of Minerva, representing on
the date of the conclusion of the Operation a percentage equivalent to 16.8 %
of the total and voting capital stock of Minerva and which will amount to
approximately 15.2% when the entire conversion by 2015 of mandatory
convertible debentures issued by Minerva occurs. Within the context of the
Operation, (i) BRF and VDQ signed a shareholders´ agreement under which VDQ
will maintain control of Minerva and BRF will nominate two members to the
Board of Directors, ensuring certain protective rights commensurate with its
minority participation, and (ii) Minerva and BRF signed a non-exclusive supply
contract under which Minerva will supply BRF with raw materials in a
competitive manner, with quality and guarantee the supply so that BRF will
continue with its business of providing beef products with added value. The
shareholders´ agreement and the supply contract will come into force at the
conclusion of the Operation at a date to be announced later.

BRF will also reduce its biological assets (live cattle) by approximately R$
170 million within 10 months. These assets form no part of this operation and
will be sold on the market.

Through this agreement, BRF will adjust its operating model on the beef
market. It will not leave the business but will deverticalize the chain,
leaving the management of slaughtering activities in the hands of a specialist
company – Minerva – at the same time as it reinforces its presence in the food
services and food from processed beef segments.

The implementation of the Operation is subject to the approval of the
Brazilian anti-trust agency (local acronym "CADE"). Following approval by the
CADE, the Operation will be submitted to a general meeting of Minerva
shareholders for their approval.

BRF will keep the market informed of developments related to the matter in

Sao Paulo, November 1, 2013

Leopoldo Viriato Saboya
Vice-President of Finance, Administration and Investor Relations


Contact: Ana Carolina Bastos, +55 11 2322-5037,
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