Cargill Foods tendered a $385 million bid for the pork unit of Farmland Industries, which will likely lead to an October auction process overseen by the Kansas City federal bankruptcy court, pitting Cargill against Smithfield, which offered a $363.5 million bid in July.
Cargill entered the bidding in part because it found value in Farmland’s branded products.
“Farmland Foods’ pork business will build upon Cargill’s existing strong foundation in branded and value-added meat solutions for our retail, foodservice and deli customers. Farmland Foods will be an excellent fit with us,” says Buckner.
Smithfield is the nation’s largest pork producer, Cargill ranks third in pork processing. Cargill is also the nation’s largest private corporation.
Smithfield’s bid included provisions to retain all Farmland Foods’ employees, including the management team, and honor Farmland contracts with unions and hog producers. Details of the Cargill bid are unclear and may not be made public until Sept. 16, when Farmland’s creditor’s committee is due to report to the bankruptcy court about Farmland’s liquidation process.
Farmland CEO Bob Terry welcomed Cargill’s bid.
Smithfield’s bid has received some criticism from small producers and some public officials. In August, Minnesota’s attorney general, as well as U.S. senators from Florida, Massachusetts, Montana, Nebraska, South Dakota, Vermont, Wisconsin and Wyoming asked the U.S. Justice Department to investigate Smithfield’s planned purchase of Farmland’s hog division to determine how it could affect farmers and consumers. They argued the sale to Smithfield could reduce competition substantially and have negative effects nationwide.