Smithfield Foods to Acquire Carroll's Foods

Smithfield Foods, Inc. (Smithfield, VA) has reached an agreement in principle to acquire all of the capital stock of Carroll's Foods, Inc. and its affiliated companies for approximately $500 million. Carroll's Foods is the second largest hog production company in the U.S. and is headquartered in Warsaw, NC. With this acquisition, the company has taken a major step toward achieving its long-term strategic goal of becoming a more vertically integrated company.

"This acquisition will accomplish in one transaction what the company had otherwise hoped to achieve in added hog production over the next five to 10 years," said Joseph Luter, III, chairman and CEO of Smithfield Foods. "We have had a strategic alliance with Carroll's Foods for many years and are delighted that they will now become a full-fledged member of the Smithfield family."

Smithfield Foods intends to retain the Carroll's Foods name and operate Brown's of Carolina and its other hog production interests under that name. Luter said that the company does not anticipate any major changes in Carroll's Foods' management team but does expect to take advantage of synergies between its current hog production operations and Carroll's Foods' operations.

The acquisition is subject to, among other things, the successful negotiation of a definitive acquisition agreement, the satisfactory completion of an ongoing due diligence investigation of Carroll's Foods' businesses, any applicable regulatory filings and reviews, and the approval of the company's board of directors. The company expects to close this transaction in May.