SAO PAULO (Reuters) -Brazilian food companies Marfrig and BRF are expected to announce a merger involving a share swap this evening, a source briefed on the matter told Reuters on condition of anonymity because the deal has not been made public yet.

The companies are eyeing annual synergies over 800 million reais ($140.80 million) from their tie-up, the person said, adding that the name of the new company created by Marfrig and BRF will be MBRF.

BRF processes chicken and pork products, while Marfrig focuses on beef and has a large operation in the United States, where it controls National Beef. Marfrig already owns 50.49% of BRF.

Marfrig and BRF declined to comment. Marfrig first bought a stake in BRF in May 2021, when it said it would be a passive investor.

Shares of both companies rose in Sao Paulo trading on Thursday, outperforming sector peers including Minerva and JBS .

BRF's shares closed 4.78% higher at 20.62 reais, but at one point in the session rose over 7%. Marfrig was up by 4.34% to 20.66 reais.

Earlier in the evening, Bloomberg News reported that Marfrig would make an offer for the shares it did not already own in BRF, citing sources.

($1 = 5.6817 reais)