May 18, 2011 / 12:59 PM / 8 years ago

Sara Lee in talks for Brazil coffee brand - paper

* Sara Lee could buy Brazil’s Marata coffee brand

* Brazil is the world’s No. 2 coffee consumer market

SAO PAULO, May 18 (Reuters) - U.S. diversified food company Sara Lee SLE.N, which controls 22 percent of Brazil’s retail coffee market, is in talks to buy Marata, a local producer of coffee and beverages, a local newspaper said on Wednesday.

The Valor Economico financial paper reported sources linked to both companies said Sara Lee was also open to a possible merger. An acquisition or merger would strengthen Sara Lee’s foothold in Brazil’s fast growing northeastern consumer market.

Brazil is the world’s second-largest coffee consumer market after the United States, and is the world’s largest producer and exporter of the bean.

Marata has seven processing plants in the region and a potential deal would be valued at 1 billion reais ($617 million), Valor said. Aside from coffee, the company produces teas and powdered drinks.

“The conversations began with an offer to buy from Sara Lee. Marata knows to grow, it has to make a move like this, but the family wants to continue in the business, so that’s why a merger was suggested,” one of those involved in the process told Valor.

Sara Lee was not available for a comment early Wednesday. A representative for Marata declined to comment. ($1=1.620 reais) (Reporting by Reese Ewing, editing by Maureen Bavdek)

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