Brazilian food processor BRF SA (BRFS3.SA) said on Tuesday that chief executive Lorival Luz has resigned and will be replaced by Miguel Gularte, a top executive at beef-packer Marfrig Global Foods SA (MRFG3.SA).
Shares in the poultry and pork processor were around 6% higher in early trading in Sao Paulo, but closed 1.10% lower at 16.19 reais ($3.17) as BRF investors digested the news.
“To some extent, Miguel Gularte can be described as a beef guy,” BTG Pactual analysts said in a note to clients.
Whether he can reposition BRF to face stiff competition in Brazil remains an open question. “These are very different industries and require a different set of skills,” BTG said comparing beef operations to pork and poultry processors.
BRF said the move does not reflect an intention to merge the two companies, even though the market has speculated that for some time.
Marfrig, which owns 33.27% of BRF, has said previously it was only interested in a passive stake in BRF.
But BTG analysts see Gularte’s appointment as “yet another sign of how Marfrig is effectively taking control and influencing BRF’s operations.”
XP analysts said in a note Gularte’s appointment was “unexpected,” also highlighting the fact his experience comes from the beef sector.
Still, XP believes Gularte “should be able to make BRF more agile, removing discomforting inertia that was responsible for lost opportunities in BRF’s past.”
BRF, owner of well known brands Sadia and Perdigao in Brazil, has been reeling from high cost inflation and makes most of its sales in the domestic market.
Unlike rivals JBS SA (JBSS3.SA) and Marfrig, BRF does not process cattle or owns plants in countries like the United States.
Gularte was chief executive of Marfrig until today’s announcement.
Marfrig, whose shares dropped 3.78% after the bell on Tuesday, named Rui Mendonca as new CEO for South America replacing Gularte.
