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last update:Sep 20, 2006
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.
Editor PigProgress
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