By ,
Published January 13, 2015
ConAgra Foods Inc. (CAG) said Monday it agreed to sell its refrigerated meats businesses, including the Butterball and Armour brands, to Smithfield Foods Inc. for $475 million in cash and $100 million in stock.
ConAgra, which said in February it planned to exit the refrigerated meats business, said the cash portion of the agreement is subject to adjustments in working capital while the stock portion is not subject to any sale restrictions.
The sale also includes the Eckrich, LunchMakers, Margherita and Longmont brands, as well as most of the related assets including plants and inventory. Smithfield said in March it would consider buying the brands.
The agreement is the latest in a string of acquisitions for Smithfield, which announced last month that it would buy Sara Lee Corp.'s (SLE) European meat business for $575 million.
Smithfield is the largest U.S. hog producer, and has been looking for ways to use its own raw materials internally rather than selling them in the volatile commodities market.
Smithfield said it intends to separate the Butterball turkey business from the non-turkey packaged meats business and operate it through Carolina Turkeys, an existing partnership with Maxwell Farms Inc. Smithfield owns 49 percent of Carolina Turkeys, the fourth-largest U.S. turkey producer.
ConAgra said the refrigerated meats business generated annual sales of about $1.8 billion. It plans to use the proceeds from this and other recent divestitures to help buy back stock and pay down debt.
The deal is expected to be completed during Smithfield's fiscal second quarter, which ends Oct. 30.
https://www.foxnews.com/story/conagra-to-deal-butterball-armour-other-units-for-575-million