- The Washington Times - Monday, July 31, 2006

SMITHFIELD, Va. (AP) — Smithfield Foods Inc., the largest global hog producer and pork processor, yesterday agreed to acquire most assets of the branded meats business of ConAgra Foods Inc. for about $575 million in cash and stock.

Brands being acquired include Armour, Butterball, Eckrich, Margherita, Longmont and LunchMakers, which are marketed to grocers, delis and restaurants. The brands have combined sales of about $1.8 billion.

Smithfield spokesman Jerry Hostetter said the acquisition will firm up the company’s presence in the lucrative packaged-meats business.

About $325 million of the purchase price will be allocated to Carolina Turkeys, a joint venture between Smithfield and Maxwell Farms Inc., which will operate ConAgra’s Butterball Turkey business, which has annual sales of $600 million.

The remaining $250 million of the purchase price includes $150 million in cash and $100 million in Smithfield common stock.

Dick Bond, president of competing Tyson Foods Inc., showed little concern with the announcement.

“We probably didn’t look at it in an in-depth way, primarily because basically most of the brands seemingly were on a decline and most of the assets, at least in our opinion, hadn’t had a whole lot of money put in them in recent years,” he said during a conference call yesterday morning.

Tyson, the world’s largest poultry processor, yesterday reported its second-straight quarterly loss and projected its first yearly loss since 1994.

ConAgra said the deal allows the company to simplify its operations and focus on other areas of its portfolio, strengthening successful brands, such as Healthy Choice and Banquet frozen meals.

Smithfield Foods shares fell 24 cents to close at $28.45, while ConAgra shares fell 24 cents, or 1.1 percent, to finish at $21.50 on the New York Stock Exchange.

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