US - WH Group Limited's subsidiary Smithfield Foods has entered into a definitive agreement with Hormel Foods Corporation to acquire California’s Largest Pork Processor Clougherty Packing LLC and its two affiliates for $145 million.
Upon completion, Clougherty will become an indirect wholly-owned subsidiary of WH Group.
As a leading integrated producer and processor based in California, Clougherty operates under various brands including “Farmer John” and “Saag’s Specialty Meats”.
Clougherty provides a full line of branded pork products and owns extensive sales network in the Southwestern U.S. It processes approximately 7,400 hogs daily and has sales of approximately US$500 million annually.
WH Group will also acquire two affiliates of Clougherty which operate hog farms in Arizona, California and Wyoming.
WH Group Chairman and Chief Executive Officer Mr Wan Long, said: “Considering Farmer John is the No. 1 branded bacon and the No. 1 branded sausage in California, we are delighted to acquire the premium and profitable business with its extensive customer base at a reasonable price. The acquisition not only expands and strengthens the vertically integrated supply chain of the Company’s U.S. operations, it further solidifies Smithfield’s image as a premium pork products producer and processor, while offering the Company an immediate entry into the US West Coast market. The US West Coast is a strategic location for the targeting of Asian export markets with its time advantage, compared to East Coast plants. The Company will promote the horizontal integration of Clougherty and Smithfield’s existing production, sales and distribution networks, as well as actively expand the export business, so as to generate considerable synergies.”
“By folding Farmer John into our operations, we are better positioned to take advantage of our long-term strategic growth goals, which includes an increasingly diversified customer and consumer base and greater supply chain efficiency,” said Kenneth M. Sullivan, president and CEO of Smithfield Foods.
“As we continue this transition and expand our operations, we are proud to welcome these new West Coast employees into our growing Smithfield family.”
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to be completed before the year-end of 2016.
ThePigSite News Desk