Smithfield swallows Premium Standard Farms
Smithfield Foods, US’s number one pig producer, has purchased Premium Standard Farms , based in Kansas City, Missouri, for about $810 million in cash, stock and assumed debt of $117 million.
The company said it expects the deal to close in early 2007, and doesn’t expect to close any Premium Standard plants or significantly reduce workforces.
The purchase of the number two pig grower, with about $1 billion in revenues, makes Smithfield even more dominant in pork industry.
The company said that all pig production contracts will be honoured and that Smithfield will continue to purchase pigs on the open market.
The deal breaks down to about $690 million in stock and cash, depending on the stock price at completion, with about $1.25 per share of that in cash, and $117 million in assumed debt.
Premium Standard has operations in Texas, North Carolina and Missouri, and has a sow herd of over 220,000, which compares to Smithfield’s herd of nearly a million.
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