Sale of Smithfield Beef Completes
US - Smithfield Foods has announced that it has completed the previously announced sale of Smithfield Beef, its beef processing and cattle feeding operation, to JBS S.A. for $565 million in cash.
24 October 2008
1 minute read
Smithfield Foods expects that the net proceeds of the JBS transaction (consisting of $565 million received at closing, plus approximately $150 million in net proceeds from the sale of the retained cattle inventory post-closing after payment of associated debt) will be used primarily for debt reduction.
"This transaction is significant for our shareholders," said C. Larry Pope, Smithfield Foods president and chief executive officer. "We have dramatically improved our liquidity to about $900 million, which should help us weather the difficult markets ahead. Our balance sheet is much stronger today. Additionally, we have exited the beef business, where we had a small market share and little potential to grow," he said.
As previously announced, the transaction excluded substantially all live cattle inventories held by Smithfield Beef and Five Rivers as of the closing date, together with associated debt. The excluded live cattle will be raised by JBS after the closing for a negotiated fee and sold at maturity at market-based prices.
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