Smithfield Buys ConAgra's Branded Meats

NEW YORK - Oct 3/06 - SNS -- Smithfield Foods, Inc. completed its acquisition of the assets of the branded meats business of ConAgra Foods, Inc. for $571 million in cash, subject to certain post-closing adjustments.

Originally Smithfield announced that $100 million in Smithfield Foods common stock would be part of the purchase price. Smithfield and ConAgra Foods subsequently agreed to an amendment to the original agreement, reducing the purchase price by $4 million and an all cash payment.

The business includes the packaged meats and turkey products sold under the Armour, Butterball, Eckrich, Margherita, Longmont and LunchMakers brands. The brands are marketed to retail grocers, delis, restaurants and other foodservice establishments. The combined annual sales of the businesses are about $1.8 billion.

The acquisition was completed in two parts. The Butterball turkey business was acquired by Butterball, LLC (formerly known as Carolina Turkeys), a joint venture between Smithfield Foods and Maxwell Farms, Inc., for $325 million. Smithfield owns 49% of Butterball, LLC. Smithfield acquired the other branded packaged meats assets from ConAgra Foods for $246 million.

Smithfield says Butterball, LLC is now the largest turkey producer in the U.S. with sales of more than $1 billion. In fiscal 2006 Butterball sales were $600 million and Carolina Turkeys' sales were $495 million. The new organization will be led by Keith Shoemaker, formerly of Carolina Turkeys, who will be chief executive officer of the new company.

The other packaged meats assets which produce further processed pork products will be operated as a unit of Smithfield's subsidiary, John Morrell & Co., under the banner of Armour Eckrich.