Smithfield Foods Completes Acquisition Of ConAgra Foods Refrigerated Meats Business
US - Smithfield Foods, Inc. yesterday announced that it had completed the acquisition of the assets of the branded meats business of ConAgra Foods, Inc. for $571 million in cash, subject to certain post-closing adjustments.
4 October 2006
3 minute read
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 percent of Butterball, LLC. Smithfield acquired the other branded packaged meats assets from ConAgra Foods for $246 million.
“This acquisition is a terrific strategic fit for Smithfield,” said C. Larry Pope, president and chief executive officer. “We are now a partner in the largest turkey business in the United States that adds to our multi-legged stool in terms of our protein portfolio, providing stability of financial performance and diversity in our product mix. Butterball is a national brand with impressive brand equity. We also are adding 600 million pounds of packaged meats, almost all of which are branded, with large market shares in hot dogs, dinner sausages and luncheon meats. This immediately advances our strategy of growing our packaged meats business, utilizing raw material internally, as well as migrating to higher margin, convenience products,” he said.
“We are delighted to have completed this transaction in advance of our original timeframe,” said Gary Rodkin, ConAgra Foods’ chief executive officer. “It enables us to increase our focus on priority brands and pursue additional cost-reduction efforts earlier than originally expected.”
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.
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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 percent of Butterball, LLC. Smithfield acquired the other branded packaged meats assets from ConAgra Foods for $246 million.
“This acquisition is a terrific strategic fit for Smithfield,” said C. Larry Pope, president and chief executive officer. “We are now a partner in the largest turkey business in the United States that adds to our multi-legged stool in terms of our protein portfolio, providing stability of financial performance and diversity in our product mix. Butterball is a national brand with impressive brand equity. We also are adding 600 million pounds of packaged meats, almost all of which are branded, with large market shares in hot dogs, dinner sausages and luncheon meats. This immediately advances our strategy of growing our packaged meats business, utilizing raw material internally, as well as migrating to higher margin, convenience products,” he said.
“We are delighted to have completed this transaction in advance of our original timeframe,” said Gary Rodkin, ConAgra Foods’ chief executive officer. “It enables us to increase our focus on priority brands and pursue additional cost-reduction efforts earlier than originally expected.”
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.
ThePigSite News Desk
