Maple Leaf Foods tendered a $378 million offer to Smithfield Foods to buy Canadian pork processor Schneider Corp., a move likely made to help finance Smithfield’s effort to buy the pork unit of bankrupt Farmland Industries.
Smithfield may be raising cash for an upcoming bidding war with Cargill Foods over Farmland, by agreeing to the sale of Schneider. Cargill offered a $385 million bid for Farmland’s pork division, trumping the $363.5 million offered by Smithfield. A court supervised auction is set for October.
For Smithfield, which acquired a 63 percent interest in Schnedier in Novermber 1998 for $70 million, along with $57 million of the company’s debt and then bought the remaining shares in 2001 for $51 million more, the deal nets about $200 million.
Maple Laf, a food-processing company based in Toronto, will assume about $75 million in outstanding debt as part of the purchase of Ontario-based Schneider, which had sales of $770 million in its 2003 fiscal year. Schneider makes packaged deli meats, hot dogs and bacon.