(Recasts with CEO interview, share price)
SAO PAULO, June 25 (Reuters) - Brazilian meat processor BRF SA will pay for its acquisition of pet food company Mogiana Alimentos with cash on hand, Chief Executive Lorival Luz said in an interview on Friday.
The deal marks BRF’s second acquisition for an undisclosed value in the sector this month after a deal to buy Hercosul.
Luz said in the telephone interview he does not envision other deals in the pet sector in the near term, adding that the company plans to grow both companies organically.
BRF shares slid almost 1.2% in early afternoon trading to 28.31 reais.
BRF, which did not disclose the value for either transaction, said the acquisitions would give it a roughly 10% share of Brazil’s pet food market, which has been on an upswing, leading to new entrants and initial public offerings.
BRF said it made the deals through subsidiary BRF Pet SA.
In the pet food market for over 46 years, Mogiana Alimentos specializes in animal nutrition products for dogs and cats, BRF said in a securities filing.
Mogiana, headquartered in São Paulo state, also exports to countries in the Caribbean, Europe and South America.
BRF, the world’s largest chicken exporter, is taking advantage of lower corn prices in June to rebuild stocks, Luz said. Corn is a key ingredient to make feed for chicken and also hogs, which BRF also processes.
After historical highs of more than 100 reais per 60 kg bag in May, corn fell to around 86 reais in Brazil.
As prices spiked, Luz said BRF resorted to importing corn from Mercosur countries and is eyeing additional supplies from Argentina and Paraguay. He did not rule out importing corn from the United States if market conditions are favorable. (Reporting by Ana Mano Editing by Jason Neely, Mark Potter and Jonathan Oatis)