Smithfield, Virginia, September 29, 1999 - Smithfield Foods, Inc. (NYSE:SFD), announced today that it is acquiring all of the outstanding capital stock of The Pork Group, Inc., a wholly owned subsidiary of Tyson Foods, Inc. (NYSE:TSN) in exchange for approximately 3 million shares of Smithfield Foods, Inc. common stock which will carry certain restrictions. The Pork Group, Inc. represents the hog production operations of Tyson Foods and has approximately 110,000 sows located principally in the Midwest as well as small operations in North Carolina. Combined, these operations are capable of producing approximately 1.8 million market hogs annually. It is expected that this transaction will close on or about January 2, 2000.
Smithfield Foods, Inc., through its two subsidiaries Carroll's Foods, Inc. and Brown's of Carolina, Inc., is the nation's largest hog producer raising hogs in North Carolina, South Carolina, Colorado, Utah and Virginia. Including the previously announced acquisition of Murphy Family Farms, the combined Smithfield Foods level of hog production with this acquisition will be approximately 13% of U.S. hog slaughter bringing the company's level of domestic vertical integration to just under 70%.
Carroll's Foods also raises hogs through joint ventures in Brazil and Mexico and Smithfield Foods, through its subsidiary Smithfield Foods of Mexico, participates in a vertically integrated pork production and processing operation in Mexico. In addition, Smithfield subsidiaries in Canada (Schneider Corporation) and Poland (Animex S.A.), while not vertically integrated, are also involved in hog slaughter as well as further processing operations.
The acquisition is subject to the successful negotiation of a definitive acquisition agreement, the satisfactory completion of due diligence of The Pork Group, Inc., approval of the transaction by the respective companies, Boards of Directors and third party consents and approvals required by law, governmental regulations, bank and other agreements.
Smithfield Foods is the largest vertically integrated producer and marketer of fresh pork and processed meats in the United States. The Company's brands include Smithfield Lean Generation, Smithfield Premium, Gwaltney, John Morrell, Patrick Cudahy, Schneiders, Krakus, Lykes, Esskay, Kretschmar, Valleydale, Jamestown, Dinner Bell, Sunnyland, ReaLean, Patrick's Pride, Great, Tobin's First Prize, Peyton's, Rodeo, IQM, Curly's, Ember Farms and others.
This news release may contain "forward-looking" information within the meaning of the federal securities laws. The forward-looking information may include statements concerning the Company's outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. The risks and uncertainties include availability and prices of live hogs and raw materials, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital and actions of domestic and foreign governments.