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Smithfield Foods To Acquire Sara Lee’s European Meats Business

by 5m Editor
6 July 2006, at 12:00am

EU - Smithfield, Virginia (June 27, 2006)—Smithfield Foods, Inc. (NYSE: SFD) today announced that it has signed a purchase agreement to acquire the European meats business of Sara Lee Corporation (NYSE: SLE) for $575 million, plus the assumption of pension-related liabilities in an amount not to exceed $39 million.

Smithfield Foods To Acquire Sara Lee’s European Meats Business - EU - Smithfield, Virginia (June 27, 2006)—Smithfield Foods, Inc. (NYSE: SFD) today announced that it has signed a purchase agreement to acquire the European meats business of Sara Lee Corporation (NYSE: SLE) for $575 million, plus the assumption of pension-related liabilities in an amount not to exceed $39 million.

Smithfield intends to complete and finance the acquisition of Sara Lee’s European meats business on a stand-alone, non-recourse basis through a 50 percent-owned joint venture with Oaktree Capital Management, LLC.

The transaction is subject to customary regulatory and closing conditions and is expected to close by the end of September.

Smithfield intends to contribute its Jean Caby operations to the joint venture with Oaktree. Group Jean Caby had sales of $372 million in fiscal 2006 and is a major producer of branded and private label processed meats to retail and foodservice customers in France and other European countries.

Sara Lee’s European meats business generated $1.1 billion in sales in fiscal 2005 and holds its largest positions in France, Portugal and the Benelux region, with popular European brands such as Aoste, Justin Bridou and Nobre. The company also has a presence in Germany, Italy and the United Kingdom.

“This acquisition is an important step,” said Robert A. Sharpe II, who will be chief executive officer of the new company. Mr. Sharpe currently is president, international operations of Smithfield. “Our strategy going forward will be to develop leading companies with strong brands directed by dynamic local management,” he said.

“The Sara Lee business is well positioned with strong brands and broad distribution and is an important player in processed meats in Western Europe,” said C. Larry Pope, president and chief operating officer of Smithfield. “We are pleased to be moving to the next phase with Sara Lee in the acquisition process,” he said.

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5m Editor