Batista brothers buy Brazilian assets from Vale

(Bloomberg) Brazilian brothers Batista built the world's largest meat supplier through a ruthless business, often buying unwanted assets and reversing them. Now, with substantial funds, they are entering the mining business.

J&F Investimentos S.A., owned by the Batista family, became the surprise buyer of some of Vale SA's operations in Brazil, according to a regulatory document filed Wednesday. The assets include manganese and iron ore mines, as well as logistics operations, with a total value of US$1.2 billion, including debt.

J&F and Vale declined to comment beyond the documents submitted.

Brothers Joesley and Wesley Batista have an equity of $7.7 billion, according to the Bloomberg Billionaire Index. Most of it comes from its majority stake in JBS S.A., a US$18 billion global meat giant that controls a quarter of beef processing in the United States.

The large dividends of JBS have allowed the Batistas to diversify in recent years, entering the areas of financial technology, cellulose and even cosmetics and television. This week's operation, which is yet to be approved by regulatory bodies, would represent their first major investment in mining.

With Vale's assets, the brothers are betting on a sector that has fueled some of Latin America's greatest fortunes, having greatly benefited from high metals prices driven by the pandemic's economic upturn and, more recently, supply disruptions following the war in Ukraine. Those fortunes include the Chilean Luksic family, which controls a major copper producer, and the Ermírio de Moraes family, which owns an aluminum manufacturer.

The Batistas would also inherit a logistics network that they could use with their other businesses.

However, their foray into mining takes them to another sector that has been at the center of environmental and social concerns, namely two disastrous landslides in tailings dams owned by Vale.

The brothers, who have provoked headline-grabbing political scandals in the past, are already being criticized by investors and activists for the role that beef has played in deforestation.

For Vale, selling is another step in a years-long divestment strategy.

Last December, the company abandoned its coal business in Mozambique. Prior to that, it sold a troubled New Caledonian nickel mine and manganese assets in southeastern Brazil, collected $1.3 billion for its shares in Mosaic Co. and completed the sale of a 50% stake in California Steel Industries Inc. to Nucor Corp. for $400 million. Vale also talked about selling a 40% stake in bauxite producer MRN.

Original Note:

Meat Billionaires Turn to Mining as Batistas Buy Vale Assets (1)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.