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OMAHA -- ConAgra Foods, Inc. here has signed an agreement to sell its refrigerated meats businesses to Smithfield Foods for $475 million in cash and $100 million in Smithfield Foods stock.
The sale includes the Butterball, Eckrich, Armour, LunchMakers, Margherita, and Longmont brands, as well as most of the associated assets including plants and inventory. The combined annual sales for the refrigerated meats businesses are about $1.8 billion; results for these businesses are classified as discontinued operations.
"This sale is a significant milestone for ConAgra Foods, and part of an ongoing process to simplify our operations and to focus our efforts on areas of our portfolio where we have the greatest opportunities," said Gary Rodkin, ConAgra Foods president and c.e.o. "It is a key catalyst in our plans and allows rapid progress on cost initiatives needed to fuel our future growth."
The company said proceeds from this and other previously announced divestitures could be used for a number of alternatives, including reducing debt and repurchasing shares.
Consistent with plans announced in February concerning the sale, the company confirmed that it will retain the Hebrew National brand and products, Brown 'N Serve frozen sausage, as well as its Slim Jim and Pemmican meat snacks because of their strong brand equities, fit and growth potential within the company's overall portfolio.
The transaction is subject to Hart-Scott-Rodino antitrust clearance and other customary closing conditions, and is expected to be completed during Smithfield's fiscal second quarter, which ends October 30, 2006.