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Shares of food processing giant Brasil Foods tumbled on Thursday after a key member of Brazil's antitrust regulator voted against the merger that created it.

The company, the world's largest poultry processor and Brazil's second-largest employer, saw its stock drop more than 6 per cent in early trading in Sao Paulo, falling to as low as 24.30 reais.

A director of Brazil's Cade antitrust regulator on Wednesday voted against the 2009 takeover of poultry producer Sadia by smaller rival Perdigao, arguing the resulting company - Brasil Foods - would have too much power to influence prices.

Cade suspended a vote on the ruling to June 15 to assess the effect of a decision that could spark billions of reais in losses.

The company plans to speak to the remaining four Cade board members to convince them of the benefits of the existence of Brasil Foods, and find solutions to avoid any threats to competition, said Wilson Mello, vice-president for institutional relations at the Sao Paulo-based company.

Analysts for Itau struck a positive note, pointing out that the vote of Cade director Carlos Ragazzo was expected and that the other four directors had not yet cast their votes.

"We continue to believe that the deal has a chance of being approved, with significant restrictions that include the sale of brands … sale/lease of capacity and the opening of its distribution/logistics network to competitors," the analysts said.

Brasil Foods is one of the country's biggest government-engineered mergers and part of former president Luiz Inacio Lula da Silva's efforts to create home-grown conglomerates in sectors he deemed strategic, such as commodities, food processing and telecommunications.

The government facilitated the transaction by deploying large credit lines through its state development bank BNDES.

The ruling comes as Brazil continues to struggle with inflation that is a key concern among policy makers, despite having slowed in recent weeks. Food prices have been one of the top drivers of inflation.

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