SMITHFIELD, Va. (AP) — Smithfield Foods Inc. said Wednesday it is selling its beef operations for $565 million to Brazil's JBS SA, the second deal in two days for JBS, which is becoming the largest meat processor in the United States.
The deal comes a day after National Beef Packing Co., the nation's fourth-largest beef processor, said it is being acquired by JBS for cash and stock deal worth $560 million.
Smithfield Foods is the fifth-largest U.S. beef producer.
Smithfield had promised to build a huge processing plant for beef in the Oklahoma Panhandle. But in December, after 11 months of delays, the company said it could be years before a decisions is finally made on the plant.
''While outperforming the industry, our beef group has nevertheless been a relatively minor player, as we have been unable to grow through acquisition or justify building a new plant in this adverse environment,'' C. Larry Pope, Smithfield's president and chief executive officer, said in a statement. ''It makes sense to exit the beef business at this time.''
Smithfield shares rose $1.50, or 5.4 percent, to $29.38 in morning trading Wednesday.
Combined with JBS' $225 million acquisition of Greeley, Colo.-based Swift Foods Co. last year, the National Beef and Smithfield Foods deals would make JBS the largest meat processor in the U.S., ahead of Cargill Meat Solutions.
On Tuesday, Kansas City-based National Beef said JBS, the world's largest beef processor, will pay National Beef members about $465 million in cash and $95 million in JBS shares.
Under the deal, which still requires regulatory approval, JBS will assume an undisclosed amount of National Beef's debt.
JBS directors approved both deals Tuesday, according to minutes of a board meeting posted on JBS' Web site.
In a news release, National Beef said its president, Tim Klein, will become president and chief operating officer of the joint National Beef/JBS-Swift beef operations.
''Being able to diversify through JBS will put our company in a position to compete long term in an increasingly competitive environment,'' said Steve Hunt, chief executive officer of U.S. Premium Beef, the majority owner of National Beef. ''Our producer owners and other producers who market cattle through USPB will now have a more geographically diversified company with multiple locations to deliver the high-quality cattle they produce for our value-added programs.''
Wesley Batista, CEO of JBS USA Inc., said National Beef would give the company greater access to markets in North America and the Pacific Rim.
National Beef has operations in Liberal, Kansas City and Dodge City, Kan.; Brawley, Calif.; Hummels Wharf, Pa.; and Moultrie, Ga. The company had $5.6 billion in sales last year and processed almost 4 million head of cattle.
Smithfield Beef, which has major facilities in Green Bay, Wis.; Tolleson, Ariz.; Plainwell, Mich.; and Souderton, Pa., processes more than 2 million head of cattle a year and its sales exceed $2.5 billion annually.
JBS had $11.9 billion in revenue in 2007 with operations in Brazil, Argentina, the U.S. and Australia.
The minutes of Tuesday's JBS board meeting also said the Sao Paulo-based company plans to acquire Australian meat company Grupo Tasman for about $150 million cash.
