February 28, 2009

 

Tyson and XL Foods to complete Lakeside sale by mid-March

The sale of Lakeside Farm Industries by Tyson Foods, Inc. to XL Foods Ltd. is expected to be completed by mid-March, officials from both companies reported.

 

The transaction, which was first announced in June 2008, is proceeding now that the Canadian Competition Bureau has indicated it will not challenge it.

 

Lakeside is one of Canada's leading beef processing operations, but it no longer fits Tyson's long-term strategy, said Leland Tollett, interim president and CEO of Tyson Foods, explaining the sale.

 

Tyson's current international focus is primarily on expanding the company's presence in Asia, Mexico and South America.

 

"While Tyson will no longer own a beef plant in Canada, we fully intend to continue buying Canadian cattle to supply some of our US beef operations, such as our beef complex in Pasco, Washington," according to Tollett.

 

The C$105.5 million sale of Lakeside includes C$55.5 million that will be paid at closing. The remaining C$50 million, plus interest, will be paid over a five-year period following closing. XL is also buying cattle, feed, fertiliser and packaging inventories as part of the transaction.

 

Lakeside Farm Industries, based in Brooks, Alberta, is a diversified agribusiness involved in cattle feeding, slaughtering and processing, as well as retail fertiliser production and farming.

 

The Lakeside beef plant currently has the capacity to slaughter and process 4,700 cattle per day. The commodity boxed beef produced by the plant is primarily sold to customers in Canada and the US.

 

XL Foods Inc. is the largest Canadian owned and operated beef processor in Canada. It is part of the Nilsson Bros. Group of companies, which is a diverse agri-business that is involved in all facets of beef and cattle production, marketing and processing. XL Foods Inc. operates facilities in Alberta, Saskatchewan, Nebraska and Idaho.

 

Tyson Foods, Inc., founded in 1935 with headquarters in Springdale, Arkansas, is the world's largest processor and marketer of chicken, beef and pork. The company produces a wide variety of protein-based and prepared food products for the US and more than 90 countries.

 

US$1 = C$1.27480 (Feb 28)