Brasil Foods (BRF) has signed a binding agreement to buy a 49% stake, and management control in Federal Foods, a privately-held company headquartered in Abu Dhabi, for $36m. This acquisition will be part of BRF's strategy to strengthen its brands and distribution network in the Middle East region.

The remaining stake in Federal Foods will be held by Al Nowais Investments, which currently owns the Abu Dhabi company.

Set up in 1991, Federal Foods caters to retail, foodservice and wholesale clients in UAE. It has six branches in the Emirates and one in Qatar, and employs 1,350 people. In fiscal 2011, it reported net sales of $266m and distributed 92,000 tons of products.

Federal Foods has been a distributor of BRF products in the UAE for the last two decades and these products contribute about 65% of its total net sales.

Following the acquisition, BRF plans to sell its products in the UAE through Federal Foods and the line-up from the processed products facility will start from 2013.