Smithfield Foods completes $800 million purchase of Premium Standard Farms

By Lisa Kerner

Charlotte, N.C., May 7 - Smithfield Foods, Inc. completed its acquisition of Premium Standard Farms, Inc. for $800 million, including $125 million of net debt.

Premium Standard shareholders received 0.678 shares of Smithfield stock plus $1.25 in cash for a total value of $22.13 per Premium Standard Farms share.

Smithfield said it issued about 21.7 million shares in exchange for Premium Standard shares.

"This combination is a great strategic fit for Smithfield," Smithfield president and chief executive officer C. Larry Pope said in a company news release.

"The acquisition of Premium Standard Farms fits well with our strong expertise in hog production and pork processing."

Premium Standard will operate as a wholly owned subsidiary of the Smithfield, Va., pork processor.

Paul J. Fribourg, chairman, president and chief executive officer of ContiGroup Cos. Inc., has been elected a member of the board. In addition, ContiGroup's chief financial officer, Michael J. Zimmerman, has been appointed an advisory director. ContiGroup owned 38.8% of Premium Standard's common stock prior to the acquisition.

Premium Standard is a vertically integrated provider of pork products based in Kansas City, Mo.

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