CAG ConAgra Brands Inc

SMITHFIELD, Va., July 31 /PRNewswire-FirstCall/ -- Smithfield Foods, Inc. (NYSE:SFD) today announced that it has signed a definitive agreement to acquire substantially all of the assets of the branded meats business of ConAgra Foods, Inc. (NYSE:CAG) for $575 million. The business includes the packaged meats and turkey products sold under the Armour, Butterball, Eckrich, Margherita, Longmont and LunchMakers brands. The brands are marketed to retail grocers, delis, restaurants and other foodservice establishments. The combined annual sales of the businesses are about $1.8 billion. "This acquisition furthers our strategy of growing the packaged meats side of our business with higher-value, further-processed and pre-cooked products," said C. Larry Pope, president and chief operating officer of Smithfield Foods. "In addition, this continues our previously announced strategy of utilizing our superior raw materials internally as opposed to selling in the commodity market. These brands will allow us to capture sales and marketing opportunities and more fully serve the needs of our retail and foodservice customers," said Mr. Pope. Smithfield intends to separate the Butterball turkey business from the non-turkey packaged meats business and acquire and operate the Butterball turkey business through Carolina Turkeys, an existing partnership between Smithfield Foods and Maxwell Farms, Inc. Smithfield owns 49 percent of Carolina Turkeys, the fourth largest turkey producer in the United States. Smithfield said that $325 million of the purchase price will be allocated to the Carolina Turkeys joint venture with the remaining $250 million purchase price paid with $100 million in Smithfield Foods common stock and $150 million in cash. Sales of the turkey operations are about $600 million while the remaining branded meats businesses are about $1.2 billion. "The addition of Butterball is a big positive for Carolina Turkeys' business. Butterball is well-recognized and highly-trusted with strong brand equity and national distribution," said Mr. Pope. The transaction is subject to Hart-Scott-Rodino antitrust clearance and other customary closing conditions. Smithfield expects to complete the transaction during its fiscal second quarter which ends October 30, 2006. The shares of Smithfield Foods common stock to be issued to ConAgra in this transaction have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from the registration requirements. Smithfield Foods has agreed to file a registration statement with the SEC with respect to the resale of such shares. This news release is not an offer to sell or the solicitation of an offer to buy the securities discussed herein. With sales of $11 billion, Smithfield is a leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, please visit http://www.smithfieldfoods.com/. ConAgra Foods Inc. (NYSE:CAG) is one of North America's largest packaged food companies, serving consumer grocery retailers, as well as restaurants and other foodservice establishments. Popular ConAgra Foods consumer brands include: Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM and many others. For more information, please visit http://www.conagrafoods.com/. This news release may contain "forward-looking" information within the meaning of the federal securities laws. The forward-looking information may include statements concerning the company's outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. These risks and uncertainties include availability and prices of livestock, raw materials and supplies, livestock costs, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards, adverse results from ongoing litigation and actions of domestic and foreign governments. DATASOURCE: Smithfield Foods, Inc. CONTACT: Jerry Hostetter of Smithfield Foods, Inc., +1-212-758-2100, Web site: http://www.smithfieldfoods.com/ http://www.conagrafoods.com/

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