SCHEDULE: SALIC Divests BRF S.A. Stake, Enters Derivative Deal

SALIC International Investment Company has sold its 185.5 million common shares in BRF S.A. and simultaneously entered into a cash-settled derivative transaction referencing the same shares.

Summary

• SALIC Investment executed a sale of 185,556,900 common shares of BRF S.A. at an approximate net price of R$19.96 per share.
• The disposition occurred via an auction on B3 S.A. Brasil, Bolsa, Balcao on September 2, 2025, with settlement on September 4, 2025.
• As a result of this transaction, the Reporting Persons (SALIC International Investment Company, Saudi Agricultural and Livestock Investment Company, and The Public Investment Fund) ceased to be beneficial owners of more than five percent of BRF S.A.'s outstanding common shares as of September 4, 2025.
• Concurrently with the disposition, SALIC Investment entered into a cash-settled derivative transaction referencing the same 185,556,900 common shares with an unaffiliated third-party financial institution.
• SALIC Investment made an upfront payment and will pay certain non-refundable fees for the derivative transaction, which is currently scheduled to expire on September 2, 2026.

Sentiment

Score: 3

Explanation: The sentiment is moderately negative for BRF S.A. due to a large block sale by a significant investor, which typically creates downward pressure on the stock. While the seller realizes value, the issuer faces potential market uncertainty. The derivative transaction adds a layer of complexity but does not fully offset the immediate impact of the divestment.

Positives

• SALIC Investment realized approximately R$3.7 billion from the sale of its BRF S.A. common shares.
• The derivative transaction allows SALIC Investment to maintain exposure to the underlying shares' performance without direct beneficial ownership, potentially for strategic or hedging purposes.

Negatives

• The significant disposition of 185,556,900 common shares by a major investor could exert downward pressure on BRF S.A.'s stock price due to increased supply in the market.
• The Reporting Persons no longer hold a significant beneficial ownership stake (above 5%) in BRF S.A., potentially reducing their influence or perceived commitment to the company.
• SALIC Investment incurred an upfront payment and will pay ongoing non-refundable fees for the derivative transaction.

Risks

• The derivative transaction exposes SALIC Investment to the market price fluctuations of BRF S.A. common shares until its expiry on September 2, 2026.
• The cash settlement nature of the derivative means SALIC Investment will not receive physical shares, limiting potential strategic control or direct voting rights.

Future Outlook

SALIC Investment's derivative transaction referencing BRF S.A. common shares is scheduled to expire on September 2, 2026, at which point a cash settlement payment will be determined based on the settlement price of the then-remaining referenced shares.

Management Comments

• Sulaiman AlRumaih, Chief Executive Officer of SALIC International Investment Company and Saudi Agricultural and Livestock Investment Company, certified the information set forth in the statement.
• Yasir O. AlRumayyan, Governor of The Public Investment Fund, certified the information set forth in the statement.

Industry Context

This filing reflects a significant portfolio adjustment by a major sovereign wealth fund (The Public Investment Fund of Saudi Arabia, through its subsidiaries) in a leading Brazilian food processing company. Such large-scale divestments can signal a strategic re-evaluation of sector exposure or specific company prospects, potentially impacting investor sentiment towards BRF S.A. and the broader Latin American food industry.

Comparison to Industry Standards

• NA

Stakeholder Impact

• **Shareholders of BRF S.A.:** May experience increased volatility and potential downward pressure on share price due to the large block sale and the exit of a significant beneficial owner.
• **SALIC Investment:** Realized significant cash proceeds from the sale and entered into a derivative to manage future exposure, impacting its portfolio composition and risk profile.
• **Third-Party Financial Institution (Dealer):** Assumed the counterparty risk and obligations related to the cash-settled derivative transaction.

Next Steps

• SALIC Investment may, at any time prior to September 2, 2026, exercise its right to cause the settlement of the derivative transaction for all or a portion of the referenced shares.
• At the expiry of the derivative transaction on September 2, 2026, SALIC Investment will receive a cash settlement payment from the Dealer based on the settlement price of the then-remaining referenced shares.

Key Dates

Recommendation

While a large block sale by a significant investor like SALIC typically creates downward pressure, the concurrent derivative transaction suggests a nuanced strategy rather than a complete exit from exposure. Investors should hold to observe the market's reaction to the disposition and the implications of the derivative, as well as BRF S.A.'s operational performance, before making further investment decisions. The immediate impact is likely negative, but the long-term implications require further analysis.

Keywords

BRF S.A., SALIC, Public Investment Fund, Share Sale, Derivative Transaction, Schedule 13D, Beneficial Ownership, Brazilian Stock Exchange, Divestment, Food Industry