Farmland Industries has reached an agreement with U.S. Premium Beef to buy the remaining 71 percent of the beef packing company for $232 million.
U.S. Premium Beef's bid is subject to court approval as a "stalking horse" bid as part of the auction process.
Farmland National Beef is the fourth largest beef packer in the nation, processing 3.2 million head of cattle per year. The company's assets include beef packing plants in Liberal and Dodge City, Kan., as well as further processing facilities in Kansas City, Kan., Hummels Wharf, Pa., and Moultrie, Ga. Farmland National Beef also owns National Carriers, a 700-unit refrigerated trucking operation.
"Farmland National Beef is a company with a strong balance sheet and a history of success,” says Bob Terry, Farmland president and chief executive officer. “The agreement to sell our share of Farmland National Beef to our partner is fully supported by Farmland's Creditors' Committees.”
"We are excited about the potential purchase of Farmland Industries' interest in Farmland National Beef," says Steve Hunt, chief executive officer of U.S. Premium Beef. "We believe additional ownership of FNB will enable us to grow that network of producer-owners and increase FNB's presence in the world marketplace."
At a court hearing held in Kansas City on Tuesday, Farmland asked U.S. District Court Judge Jerry Venters to approve bid and auction procedures, set a time to qualify other potential bidders and set a date for the auction. Farmland expects to file the sale agreements with the Bankruptcy Court later this week and anticipates completing the sale later this summer.