1 MARFRIG GLOBAL FOODS S.A. PUBLIC COMPANY Taxpayer ID (CNPJ/MF): / State Registry (NIRE): NOTICE TO THE MARKET MARFRIG GLOBAL FOODS S.A. ( Company or Marfrig ), pursuant to Article 157, Paragraph 4 of Federal Law 6,404/76 and to Instruction 358/2002 issued by the Securities and Exchange Commission of Brazil (CVM), in response to Official Letter 2290/2015-SAE issued on July 3, 2015 by the São Paulo Stock Exchange BM&FBOVESPA Bolsa de Valores Mercadorias e Futuros S.A. ( BM&FBOVESPA ) (Appendix I), requesting clarification on the contents of an article published on the same date in the newspaper Valor Econômico entitled Marfrig deixa diversificação de lado e volta a focar carne bovina (Marfrig leaves diversification behind to re-focus on beef), announces to its investors and the market in general the following: Said article states that, according to information from the Company, the divestment of the Moy Park business unit would enable Marfrig to simultaneously (a) reduce its leverage ratio; (b) save on interest expenses; and (c) accelerate previously postponed investments in the United States and Asia. The Company clarifies that said effects are effectively expected as a result of the divestment of the Moy Park business unit, which was announced through a material fact notice dated June 21, 2014 ( Transaction ). Certain parts of the material fact notice expressly and literally address each of these expected effects, as shown by the excerpt specifically addressing the reduction in the leverage ratio and the savings on interest expenses: The Transaction significantly improves Marfrig's capital structure, accelerating the expected reduction in its financial leverage and the associated interest expenses. In another excerpt from the material fact, the Company mentions the "Focus to Win" strategy to highlight the growth opportunities and its priority of expanding its food service business in the United States and Asia:
2 This Transaction provides Marfrig increased focus to seek growth opportunities in its strategic plan "Focus to Win." Priority areas for Marfrig are: (i) the expansion of the food service business at Keystone in Asia and the US; (ii) the increase of beef exports from Brazil to Asia and the United States which opening is expected soon; and (iii) to strengthen the capital structure and improve free cash flows. Reducing financial leverage, saving on interest expenses and focusing on the U.S. and Asian markets were also mentioned and detailed in the conference call held on June 22, 2015, which was disclosed via the same material fact notice announcing the divestment of the Moy Park business unit. In addition to the conference call held and aligned with said material fact notice, the Company made available a Presentation on the Transaction ("Presentation") on its investor relations website (http://ri.marfrig.com.br/en/documentos/3744_apresentacao_moypark_eng.pdf). The Presentation served as the basis and guide for the conference call, highlighting, among other information: The use of proceeds from this transaction is to reduce leverage. (Slide 4) The Transaction significantly improves Marfrig's capital structure, accelerating the expected reduction in its financial leverage and the associated interest expenses. (Slide 5 and material fact) The resulting Marfrig becomes a company with a stronger focus in food service, with greater flexibility to pursue existing opportunities in this market, mainly in the United States and Asia. (Slide 3) Keystone: focus on growth in Asia and USA (Slide 5). The leverage ratio after the consummation of the Transaction, which was estimated in the article published by Valor Econômico at around 3.5 times to 3.7 times, was based on publicly available data on: a) the current debt position of the Company, which was reported in the notes to the financial statements; b) the total value of the Transaction, which was set at approximately 1.5 billion U.S. dollars; c) the data on Slide 7 of the Presentation on the Transaction, which shows that, assuming an exchange rate of BRL3.10/USD, the debt of the Company would decline by approximately R$5 billion to reach net debt of approximately R$5.7 billion; and d) the data given in the guidance, in particular free cash
3 flow generation for 2015, as announced in the material fact notice dated March 2, Therefore, the leverage figures cited in the article do not constitute a new guidance. The figure for the savings on interest expenses of approximately R$300 million cited in the article also would have been based on public information on the total value of the transaction of R$4.65 billion (exchange rate of BRL3.10/USD, based on Slide 7 of the Presentation) and an average debt cost of 7.7%, according to the notes to the financial statements. Note also that, in the material fact notice dated March 2, 2015, the Company mentioned a target leverage ratio of 2.5 times by 2018, which is consistent with the amounts cited in the article. The aforementioned clearly shows the uncompromising commitment to transparency of the Company in its communication and its respect for the best practice of corporate governance. Lastly, the Company takes this opportunity to inform that the guidance given in its material fact notice dated March 2, 2015 remains unchanged, including with regard to its CAPEX metrics. As mentioned in the Presentation, new guidance revised to reflect only the impacts of the Transaction will be given to the market after the consummation of the Transaction (Slide 5 of the Presentation). Any changes in the projections announced arising from the consummation of the Transaction will be duly informed to the market through a material fact notice, as required by CVM Instruction 358 dated January 3, São Paulo, July 6, 2015 Marcelo Di Lorenzo Strategic Planning Vice President and Investor Relations Officer
4 (APPENDIX I) 03 de julho de /2015-SAE Marfrig Global Foods S.A. Sr. Marcelo Di Lorenzo Diretor de Relações com Investidores Ref.: Solicitação de esclarecimentos sobre notícia veiculada na imprensa Prezados Senhores, Em notícia veiculada pelo jornal Valor Econômico, edição de 03/07/2015, consta, entre outras informações, que: a alienação da Moy Park permitirá a Marfrig, simultaneamente, a redução do índice do endividamento de 6,6 vezes em março para algo entre 3,5 vezes e 3,7 vezes no fim do ano e a aceleração de investimentos que vinham sendo postergados nos EUA e, sobretudo, na Ásia; a economia de juros que essa empresa conseguirá com a venda da Moy Park, que deverá ser concluída até o fim do ano, vai além dos R$ 300 milhões anuais estimados inicialmente. Solicitamos, até 06/07/2015, esclarecimentos sobre o teor da referida notícia, bem como outras informações consideradas importantes. No arquivo a ser enviado deve ser transcrito o teor da consulta acima formulada antes da resposta dessa empresa. Esta solicitação se insere no âmbito do Convênio de Cooperação, firmado pela CVM e BM&FBOVESPA em 13/12/2011, e o seu não atendimento poderá sujeitar essa companhia à eventual aplicação de multa cominatória pela
5 Superintendência de Relações com Empresas SEP da CVM, respeitado o disposto na Instrução CVM nº 452/07. Atenciosamente, Nelson Barroso Ortega Superintendência de Acompanhamento de Empresas c.c.: CVM - Comissão de Valores Mobiliários Sr. Fernando Soares Vieira - Superintendente de Relações com Empresas Sr. Waldir de Jesus Nobre - Superintendente de Relações com o Mercado e Intermediários Esclarecemos que a resposta dessa empresa deve ser enviada exclusivamente por meio do módulo IPE, selecionando-se a Categoria: Fato Relevante ou Categoria: Comunicado ao Mercado, o Tipo: Esclarecimentos sobre consultas CVM/Bovespa e, em seguida, o Assunto: Notícia divulgada na mídia, o que resultará na transmissão simultânea do arquivo para a BM&FBOVESPA e CVM.