March 14, 2009

Tyson Foods closes sale of Lakeside to XL Foods

Tyson Foods, Inc. has completed the sale of its Lakeside operations in Canada, to XL Foods Inc., with the transfer of ownership effective Saturday (Mar 14), officials from both companies reported.

Lakeside, based in Brooks, Alberta, is a diversified agribusiness involved in cattle feeding, slaughtering and processing, as well as retail fertiliser production and farming. It has been part of Tyson Foods since 2001, when Tyson bought IBP, Inc.

However, in June 2008, Tyson officials announced plans to sell the business to XL Foods, indicating Lakeside no longer fit Tyson's long-term, international business strategy.

While Tyson will no longer own a beef plant in Canada, the company plans to continue buying Canadian cattle to supply some of its US beef operations.

The C$105.5 million sale of Lakeside includes C$55.5 million in cash, which have been paid. The remaining C$50 million, plus interest, will be paid over a five-year period following today's closing. XL also purchased cattle, feed, fertiliser and packaging inventories as part of the transaction.

Lakeside currently employs 2,300 people. The beef operation 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. is the world's largest processor and marketer of chicken, beef and pork, producing a wide variety of protein-based and prepared food products to customers throughout the US and more than 90 countries. The company has more than 300 facilities and offices in the US and around the world.