Sandford (LSE:SFD)
Historical Stock Chart
From May 2019 to May 2024
ContiBeef LLC and Smithfield Foods, Inc. Agree to Merge Cattle
Feeding Businesses
BOULDER, Colo., Feb. 16 /PRNewswire-FirstCall/ -- Continuing their tradition
of leadership and commitment to the beef industry, ContiBeef LLC, a subsidiary
of ContiGroup Companies, Inc., and MF Cattle Feeding, Inc., a recently acquired
subsidiary of Smithfield Foods, Inc., have agreed to form a 50/50 joint venture
cattle feeding business. The new entity, whose name has yet to be determined,
will include all six feedyards currently owned by ContiBeef and the four
feedyards owned by Smithfield since October 2004.
The new entity will have facilities in five states (Colorado, Idaho, Kansas,
Oklahoma, and Texas) with a one-time total feeding capacity of 811,000 head and
expects to sell cattle to multiple U.S. beef packing firms throughout the U.S.
using a variety of marketing methods, consistent with the manner in which
ContiBeef's feedyards have operated historically.
The joint venture will be a stand-alone operating company, independent from
both ContiGroup Companies and Smithfield Foods. Financing for the venture will
be provided through a combination of equity investments by ContiGroup Companies
and Smithfield Foods and a non-recourse senior credit facility arranged by
Rabobank International. Further financial terms of the arrangement were not
disclosed.
Mike Thoren, currently President and Chief Executive Officer of ContiBeef, will
be named President and CEO of the joint venture. Thoren has served as
President and CEO of ContiBeef since 2003. He began his career with the
company in 1991. Thoren and a core team from both ContiBeef and affiliates of
Smithfield Foods will manage the joint venture. Headquarters for the new
entity will be located in Boulder, Colorado, the site of the current ContiBeef
corporate office.
"We believe the merger is an exciting growth opportunity for both businesses,
their employees, and for the cattle industry as a whole. ContiBeef's experience
and a long-term commitment to the cattle business are what we bring to the
table," Thoren said. "ContiBeef has been feeding cattle successfully in a
highly competitive business for a very long time. That's what we do best. Our
intention is that the new entity will continue with cattle feeding as its sole
focus for many years to come."
The new entity expects to formally commence operations by April 30, 2005. Both
ContiBeef and Smithfield Foods' feedyards will continue regular operations
throughout the transition to the new ownership structure. Thoren added that,
"we expect a seamless transition for all of our customers."
ContiBeef LLC, a wholly-owned subsidiary of ContiGroup Companies, Inc., is one
of the largest cattle feeding operations in the world marketing over one
million head of cattle annually, most of which are company owned. Its six
feedlots in Colorado, Kansas, Oklahoma, and Texas also provide a range of
feeding and management services for outside customers.
Smithfield Foods, Inc., with annualized sales of $10 billion, is the leading
processor and marketer of fresh pork and processed meats in the United States,
as well as the largest producer of hogs. The Smithfield Beef Group is the
sixth largest beef processor in the U.S.
The transaction is subject to regulatory approval and execution of a definitive
agreement.
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. These risks and uncertainties
include availability and prices of livestock, raw materials and supplies,
livestock costs, product pricing, the competitive environment and related
market conditions, operating efficiencies, access to capital, the cost of
compliance with environmental and health standards, adverse results from
ongoing litigation and actions of domestic and foreign governments.
DATASOURCE: Smithfield Foods, Inc.
CONTACT: Jerry Hostetter of Smithfield Foods, Inc., +1-212-758-2100,
, or Robin M. Derin, Communications, of
ContiGroup Companies, Inc., +1-212-207-5930,
Web site: http://www.smithfieldfoods.com/