Smithfield Foods to Purchase Premium Standard Farms

September 18, 2006 — 

Smithfield Foods has announced plans to purchase the country's second largest hog producer Premium Standard Farms (PSF) for $693 million in cash and stock. Smithfield will also assume $117 million of PSF's debt.

The purchase would give Smithfield Foods a 31 percent pork-processing marketshare and 19 percent of U.S. pork production. Company officials have indicated that all PSF contracts will be honored and that its facilities will remain open and operating at least at current production levels.

Government antitrust officials, however, could require the company to sell some assets. A bi-partisan group of Senators, including Iowa Senators Harkin and Grassley, are calling for a Department of Justice investigation into the proposed deal.

Source:
Reuters