US pork producer Smithfield Foods has announced the completion of its acquisition of substantially all of the assets of Farmland Foods, the pork production and processing business of bankrupt Farmland Industries.
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The closing followed the approval of the sale by the United States Bankruptcy Court in Kansas City, Missouri.
Smithfield was the successful bidder at an auction held earlier this month under procedures approved by the Bankruptcy Court. The purchase price for the Farmland Foods business was US$367.4m in cash, plus the assumption of certain Farmland liabilities, and is subject to post-closing adjustments for certain working capital items, Smithfield said.
The assumed liabilities include the pension obligations and associated assets of both Farmland Foods and Farmland Industries, with Smithfield’s agreement to assume such pension obligations valued at $90m in the auction by the debtor. The company said that the actual net pension liability assumed by Smithfield, and to be reflected in the company’s financial statements, will be calculated in accordance with generally accepted accounting principles, and is expected to be substantially less.
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