Smithfield Foods claims that its winning bid to acquire Farmland Foods from Farmland Industries is good news for Farmland's employees, independent hog producers, communities, pensioners and creditors. It says that the acquisition ends more than a year of uncertainty and provides optimism and confidence for the future.
The auction was held at Farmland headquarters on 12 October 2003, under auction and bid procedures approved by the United States Bankruptcy Court. Smithfield was the successful bidder at the auction to acquire substantially all of the assets of Farmland Foods, the pork production and processing business of Farmland Industries for $367.4 million (€315.3m).
In addition, Smithfield has assumed certain Farmland liabilities. These include the pension obligations, and associated assets, of both Farmland Foods and Farmland Industries as well as certain post petition liabilities of Farmland Foods. In the auction, Smithfield's agreement to assume the pension obligations was valued at $90 million by the debtor.
"We are very pleased to welcome Farmland Foods to the Smithfield Foods family of companies," said C. Larry Pope, Smithfield president and chief operating officer.
"We have had a continued interest in acquiring Farmland Foods for nearly 18 months, and our patience has finally been rewarded. Farmland has a strong brand name, an excellent management team, as well as an outstanding working relationship with independent hog producers.
Farmland Foods has annual sales of $1.6 billion. Smithfield stated that it expects the transaction to be accretive to its earnings immediately after closing. With annualised sales of $8 billion, Smithfield Foods is a leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs.