August 11, 2006 

Smithfield completes Sara Lee acquisition

Smithfield Foods and its partner Oaktree Capital Management, LLC, completed the acquisition of Sara Lee Corp.'s European meat business, and announced that the 50/50 joint venture, named Groupe Smithfield, would be headquartered in Paris.

Robert Sharpe, Smithfield's president of international operations, has been named chief executive of Groupe Smithfield.

The company also named other key appointments. Rik Jacob will remain president of Imperial Meat Products in Belgium; Luc Van Gorp was named president of Groupe Aoste, a combination of Sara Lee's Groupe Aoste and Smithfield's Groupe Jean Caby and would be based in Paris.

Smithfield said it would contribute to its French subsidiary, Jean Caby, bolstering its other operations in France, Poland, Romania and Britain.

The EU said the French tie-up was the most significant overlap between the two companies but it is not hurting the venture as the combined company would continue to face several competitors in its product categories.

Jean Caby had sales of US$372 million in fiscal 2006 and is a major producer of branded and private label processed meats in France and other European countries.

The Sara Lee acquisition is being financed by a temporary unsecured credit facility while Smithfield establishes a long-term permanent credit facility.

Groupe Smithfield paid US$575 million and up to US$39 million in pension liabilities for Sara Lee's European meat brands.