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OMAHA - ConAgra Foods, Inc. yesterday said it has completed the previously announced divestiture of its chicken processing business to Pilgrim's Pride as part of ConAgra's ongoing plan to reshape its portfolio to focus on its branded and value-added food businesses.
For its chicken business ConAgra Foods received $300 million in cash and more than 25 million shares of Pilgrim's Pride stock. The marketing of these shares is subject to an agreement in which one-third can be sold one year after closing, another third can be sold two years after closing, and the remaining third can be sold three years after closing.
The sale price was based on the $545 million book value of the chicken business at the time of closing. ConAgra Foods noted that the cash portion of the sale price was greater than it originally estimated, and it is providing no debt financing as part of this deal.
In related news ConAgra also announced yesterday it has completed the previously announced divestiture of United Agri Products (UAP), its U.S. and Canadian crop inputs business, to Apollo Management, L.P.
For United Agri Products, ConAgra received $500 million in cash and $60 million in the form of preferred securities. The company said it further expects to receive an additional $50 million in cash on the completion of the final closing balance sheet within the next few months.