Corporate Profile

The first Brazilian food company to list on the São Paulo Stock Exchange’s (BM&FBovespa) New Market (Novo Mercado) comprising those companies with high standards of corporate governance, Brasil Foods is today one of the largest companies in the Latin American food sector and one of the leaders in food production and the processing of poultry and pork meats in Brazil.

Founded in 1934 by Italian immigrants in Videira in the state of Santa Catarina, Brasil Foods S.A. has seen a major expansion in its business over the past 72 years. Over this period, it has evolved from its position as a Company dedicated simply to the production of poultry and pork meats, by launching, for example, new business platforms in the beef and margarine markets. Again in line with the policy of diversification of its activities, in 2006, Brasil Foods S.A. acquired a controlling stake in Batávia S.A., owner of the Batavo brand, the Company thus making its debut in the dairy-processed products activity.

Currently, the Company operates 41 meat processing plants, 16 milk, dairy products and desserts processing plants, 2 margarine processing plant and 1 soybean processing plant, all of them located near to their raw material suppliers or to the main consumer centers. In the foreign market the Company has subsidiaries in the United Kingdom, Italy, Austria, Hungary, Japan, The Netherlands, Russia, Singapore and United Arab Emirates and one cheese processing plant in Argentina.

The Company has an advanced distribution system, with 51 distribution centers reaching supermarkets, retail and wholesale markets, food service and other institutional clients in the domestic market and exports to more than 110 countries.

Characterized by a dispersed and diffused control, Brasil Foods provides equal rights and protective mechanisms for its shareholders and a premium for public offerings, thus fulfi lling its goal of also being the best company for its investors. The Company’s shares trade on the BM&FBovespa, which incorporates New Market Corporate Governance practices, and the New York Stock Exchange with Level III ADRs. The shares are also a component of the BM&FBovespa Stock Index (Ibovespa).

a) Interest in subsidiaries:

		Equity (%)
		09.30.09		06.30.09
PSA Laboratório Veterinário Ltda		10.00%		10.00%
Sino dos Alpes Alimentos Ltda		99.99%		99.99%
PDF Participações Ltda		1.00%		1.00%
Sino dos Alpes Alimentos Ltda		0.01%		0.01%
Avipal S.A. Alimentos		100.00%		100.00%
Estab. Levino Zaccardi y Cia. S.A.		10.00%		10.00%
Avipal Nordeste S.A.		100.00%		100.00%
Avipal S.A. Construtura e Incorporadora (e)		100.00%		100.00%
Avipal Centro-oeste S.A. (e)		100.00%		100.00%
Estab. Levino Zaccardi y Cia. S.A.		90.00%		90.00%
UP Alimentos Ltda		50.00%		50.00%
Perdigão Trading S.A. (e)		100.00%		100.00%
PSA Laboratório Veterinário Ltda		90.00%		90.00%
PDF Participações Ltda		99.00%		99.00%
Perdigão Export Ltd. (e)		100.00%		100.00%
Crossban Holdings GmbH		100.00%		100.00%
Perdigão Europe Ltd		100.00%		100.00%
Perdigão International Ltd		100.00%		100.00%
BFF International Ltd (e)		100.00%		100.00%
Highline International (e)		100.00%		100.00%
Perdigão UK Ltd		100.00%		100.00%
Perdigão France SARL		100.00%		100.00%
Perdigão Holland B.V.		100.00%		100.00%
Plusfood Group B.V.		100.00%		100.00%
Plusfood B.V.		100.00%		100.00%
Plusfood Constanta SRL		100.00%		100.00%
Plusfood Finance UK Ltd		100.00%		100.00%
Fribo Foods Ltd		100.00%		100.00%
Plusfood France SARL
Plusfood Iberia SL		100.00%		100.00%
Plusfood Italy SRL		67.00%		67.00%
Perdigão Nihon K.K.		100.00%		100.00%
Perdigão Ásia PTE Ltd		100.00%		100.00%
Perdigão Hungary		100.00%		100.00%
Plusfood UK Ltd		100.00%		100.00%
Acheron Beteiligung-sverwaltung GmbH (a)		100.00%		100.00%
Xamol Consul. Serv. Ltda (e)		100.00%		100.00%
HFF Participações S.A.		100.00%		-
Sadia S.A.		33.15%		-
Sadia S.A.		66.85%		-
Sadia International Ltd.		100.00%		-
Sadia Uruguay S.A.		100.00%		-
Sadia Chile S.A.		60.00%		-
Sadia Alimentos S.A.		95.00%		-
Concórdia Foods Ltd.		100.00%		-
Sadia U. K. Ltd.		100.00%		-
Big Foods Ind. de Produtos Alimentícios Ltda.		100.00%		-
Rezende Marketing e Comunicações Ltda.		99.91%		-
Sadia Overseas Ltd.		100.00%		-
Sadia GmbH		100.00%		-
Wellax Food Logistics C. P. A. S. U. Lda.		100.00%		-
Sadia Foods G.m.b.H.		100.00%		-
Qualy B. V. (a)		100.00%		-
Sadia Panamá S.A. (b)		-		-
Sadia Japan Ltd.		100.00%		-
Badi Ltd. (c)		80.00%		-
Investeast Ltd. (d)		-		-
Concórdia Ltd.		100.00%		-
Baumhardt Comércio e Participações Ltda.		73.94%		-
Excelsior Alimentos S.A.		25.10%		-
Excelsior Alimentos S.A.		46.01%		-
K&S Alimentos S.A.		49.00%		-
Sadia Industrial Ltda.		100.00%		-
Rezende Marketing e Comunicações Ltda.		0.09%		-

(a) The sub-holding Acheron Beteiligung GMBH has 100 direct subsidiaries in Madeira Island, Portugal, approximately interest amount is R$2,798, and the subsidiary Qualy B.V. has 48 subsidiaries in The Netherlands whose the objectives are to operate in the European market thet is ruled by importation quotas for poultry and turkey meat and increase the Company’s market participation.
(b) Closed in September 2009.
(c) 20% divestiture in September 2009.
(d) Divestiture in August 2009.
(e) Dormant companies.

History

We were founded by the Brandalise and Ponzoni families in 1934 as Ponzoni, Brandalise e Cia, in the southern State of Santa Catarina and remained under the Brandalise family’s management until September 1994. In 1940, we expanded our operations from general trading, with an emphasis on food and food-relate products, to include pork processing.

During the 1950s, we entered the poultry processing business. During the 1970s, we broadened the distribution of our products to include export markets, starting with Saudi Arabia. From 1980 through 1990, we expanded our export markets to include Japan in 1985 and Europe in 1990. We also undertook a series of acquisitions in the poultry and pork processing business and made investments in other businesses.

From 1990 through 1993, we suffered substantial losses because of increased financial expenses, underinvestment in product development, limited capacity and modest marketing of our products. By September 1994, we faced a liquidity crisis, as a result of which the Brandalise family sold their interest in our company, consisting of 80.68% of our common shares and 65.54% of our preferred shares, to eight pension funds:

• PREVI—Caixa de Previdência dos Funcionários do Banco do Brasil, or “PREVI”, the pension fund of employees of Banco do Brasil S.A.;

• Fundação Telebrás de Seguridade Social—SISTEL, or “SISTEL”, the pension fund of employees of Telecomunicações Brasileiras S.A.—Telebrás;

• PETROS—Fundação Petrobras de Seguridade Social, or “PETROS”, the pension fund of employees of Petróleo Brasileiro S.A.—Petrobras;

• Real Grandeza Fundação de Assistência e Previdência Social, or “Real Grandeza”, the pension fund of employees of Furnas Centrais Elétricas S.A.—Furnas;

• Fundação de Assistência e Previdência Social do BNDES—FAPES, or “FAPES”, the pension fund of employees of Banco Nacional de Desenvolvimento Economico e Social—BNDES;

• PREVI—BANERJ—Caixa de Previdência dos Funcionários do Banerj, or “PREVI—BANERJ”, the pension fund of employees of Banco do Estado do Rio de Janeiro S.A.;

• VALIA—Fundação Vale do Rio Doce, or “VALIA”, the pension fund of employees of Companhia Vale do Rio Doce; and

• TELOS—Fundação Embratel de Seguridade Social, or “TELOS”, the pension fund of employees of Empresa Brasileira de Telecomunicações—Embratel.

Upon acquiring control of our company, the eight original pension funds hired a new team of executive officers who restructured management and implemented capital increases and modernization programs. Our new management engaged in a corporate restructuring, disposed of or liquidated non-core business operations and improved our financial structure.

Six of the eight original pension funds remain our shareholders. TELOS and PREVI-BANERJ sold all of their shares in our company in 2003 and October 2007, respectively. On March 6, 2006, the Pension Funds entered into a shareholders’ voting agreement related to the common shares they, directly or indirectly, held at the date of its first amendment executed on April 12, 2006, which represented 48.98% of our common shares. As of November 26, 2007, the Pension Funds, directly or indirectly, held 42.83% of our common shares.

In April 2006, we have voluntarily adhered to the Novo Mercado listing standards of the São Paulo Stock Exchange on which our common shares are traded. The Novo Mercado imposes heightened standards of disclosure, transparency and corporate governance on us. For more information concerning these standards, see “Description of Share Capital.”

In July 2006, Sadia, announced a tender offer to acquire 100% of the shares of our capital stock at a price of R$27.88 per share. This bid was subject to various conditions, such as tender of shares representing more than 50% of our share capital. We published an announcement to the effect that the offerer had failed to comply with article 37 of our by-laws and that we had received declarations rejecting the offer from shareholders representing 55.4% of our share capital. Sadia subsequently increased its price to R$29.00 per share, the other conditions remaining unchanged. The offer was again rejected by shareholders representing 55.4% of our share capital. The CVM then decided that the offer was canceled. Sadia decided not to proceed further with its bid.

In November 2006, we successfully concluded a global offering of shares through the issue of 32 million new shares at a price of R$25.00 per share. As a result, we raised R$800 million, which has allowed us to continue to develop our businesses. The net proceeds of this offering have been used for acquisitions and to expand into new businesses, such as dairy products, margarine and beef products.

At the end of 2007, Brasil Foods successfully concluded a primary offering with the issue of R$ 20 million new shares at a price of R$ 45.00 per share. Ratification of the offering and the paying in of funds worth R$ 900 million took place on December 18 2007. Priority was given to the settlement of the cash portion of the Eleva Alimentos S.A. acquisition. In the light of demand for the offering, on january 14 2008, Credit Suisse (Brasil) S.A. partially exercised the greenshoe option with the issue of a further 744,200 shares at the same price and amounting to R$ 33.5 million. As a result Company´s capital stock increased to R$ 2.5 billion representing 186,701,352 common book entry shares.

On February 21 2008, the Board of Directors approved the incorporation of 54% of the shares held by the shareholders of Eleva Elimentos in Perdigão S.A. based on a exchange ratio of 1,74308855 Eleva shares for 1 BRF share, and representing 20 million issued shares. With this the Company´s capital stock increased to R$ 3.4 billion, equivalent to 206,958,103 common book entry shares.

On April, 2, 2008 the Company, on behalf of its subsidiary Perdigão Agroindustrial S.A., concluded the acquisition of 100% of the representative quotes of capital stock of the company Maroca & Russo Indústria e Comércio Ltda. (Cotochés), a company in the dairy-processed products segment in the state of Minas Gerais for R$ 54 million, as well as the assignment of debt worth R$ 15 million.

On December, 18, 2008 the Company, approved the partial split-off and the incorporation by Brasil Foods S.A. of Mato Grosso, Batávia and Maroca & Russo (Cotochés) with subsequent existion of these companies.

On March, 09, 2009, by Extraordinary General Shareholders Meeting, Perdigão S.A. incorporated Perdigão Agroindustrial S.A., achieve the Company tax costs reduction and better performance in its processes.

On May 19 2009 we signed an Association Agreement with Sadia S.A to structure a corporate operation for merging the operations of the two companies.

The following stages and operations have been established for the successful conclusion of this operation: (i) the incorporation of the Company HFF through the adhesion of the majority of shareholders of Sadia’s common shares; (ii) amendment of the corporate denomination of Perdigão S.A. to BRF – Brasil Foods S.A., including the transfer of the Company’s registered offices to the city of Itajaí in the state of Santa Catarina and other statutory adjustments for adapting the new corporate structure; (iii) on July 8 2009, the merger of shares issued by HFF by our Company in the proportion of 1 common share issued by HFF for each common share 0.166247 issued by us; (iv) migration of the remaining shareholders of Sadia to BRF through the merger of shares issued by Sadia by our Company in accordance with the following exchange ratio: 1 common or preferred share issued by Sadia for each 0.132998 common share issued by us, for which an Extraordinary General Assembly was called for August 18 2009; (v) prior to the HFF Incorporation, the sale to the ex-controllers of Sadia of Concórdia Holding, the controlling shareholder of Concórdia Corretora and Concórdia Banco, neither of which are a party to the Association.

On August 18, 2009, the merger of Sadia’s common and preferred shares was approved by BRF’ shareholders at an extraordinary shareholders’ general meeting, excluding the shares already indirectly owned by the Company, through the conference of 25,904,595 common shares and 420,650,712 preferred shares issued by Sadia, according to its economic value, in the amount of R$2,335,484, through the issuance of 59,390,963 new common registered shares with no par value issued by the Company for a R$ 39.32 price per share. From this date on Sadia became BRF’s wholly-owned subsidiary.

The business combination with Sadia is under the appreciation of the Administrative Council for Economic Defense (“CADE”). On July 7, 2009 the Company and Sadia’s Management signed the Agreement for the Preservation of the Operation Reversibility (“APRO”) which objective is to guarantee the reversibility of the operation until the final decision is granted by CADE, through measurements that allow the maintenance of competition during the evaluation of the competitive effects of the operation.

On June 29, 2009, the European Communities Commission (the European antitrust authority) approved the transaction.

On September 19, 2009 CADE authorized the coordination of external market activities of the companies related to the meat “in natura” operations.

In connection with Sadia business combination, the Company completed a primary offering with the issuance of 115,000,000 new shares plus additional allotment of 17,250,000 as described on note 17.

The Association, now in the phase of adjudication by the Administrative Council for Economic Defense (CADE), will be instrumental in reinforcing Brazil’s position as an agribusiness power, creating a global giant which will have both its scale and competitiveness based on a strong commitment to efficiency, innovation, modernity, governance and sustainability.