Smithfield Foods Completes Sale of Beef Processing and Cattle Feeding Operations...

Smithfield Foods Completes Sale of Beef Processing and Cattle Feeding
Operations to JBS

SMITHFIELD, Va., Oct. 23 /PRNewswire-FirstCall/ -- Smithfield Foods, Inc.
(NYSE: SFD) announced today that it has completed the previously announced
sale of Smithfield Beef Group, Inc. ("Smithfield Beef"), its beef processing
and cattle feeding operation, to JBS S.A. (Bovespa: JBSS3) for $565 million in
cash.
The sale included 100 percent of Five Rivers Ranch Cattle Feeding LLC
("Five Rivers"), which previously was in a 50/50 joint venture with
Continental Grain Company ("Continental Grain"). Immediately preceding the
closing of the JBS transaction, Smithfield Beef acquired Continental Grain's
50 percent investment in Five Rivers for 2,166,667 shares of Smithfield Foods'
common stock.
Smithfield Foods expects that the net proceeds of the JBS transaction
(consisting of $565 million received at closing, plus approximately $150
million in net proceeds from the sale of the retained cattle inventory
post-closing after payment of associated debt) will be used primarily for debt
reduction.
"This transaction is significant for our shareholders," said C. Larry
Pope, Smithfield Foods president and chief executive officer. "We have
dramatically improved our liquidity to about $900 million, which should help
us weather the difficult markets ahead. Our balance sheet is much stronger
today. Additionally, we have exited the beef business, where we had a small
market share and little potential to grow," he said.
As previously announced, the transaction excluded substantially all live
cattle inventories held by Smithfield Beef and Five Rivers as of the closing
date, together with associated debt. The excluded live cattle will be raised
by JBS after the closing for a negotiated fee and sold at maturity at
market-based prices.
The sale is subject to customary post-closing adjustments, including
adjustments for differences in working capital at closing from agreed-upon
targets.
Smithfield Foods' legal advisors in connection with the transaction were
Hunton & Williams LLP and Simpson Thacher & Bartlett LLP, who advised on
antitrust and regulatory matters.
With sales of $11 billion, Smithfield Foods is the leading processor and
marketer of fresh pork and packaged meats in the United States, as well as the
largest producer of hogs. For more information, visit
http://www.smithfieldfoods.com.
This news release contains "forward-looking" statements within the meaning
of the federal securities laws. The forward-looking statements includes
statements concerning the Company's outlook for the future, as well as other
statements of beliefs, future plans and strategies or anticipated events, and
similar expressions concerning matters that are not historical facts. The
Company's forward-looking information and statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, the statements. These risks and uncertainties
include the availability and prices of live hogs and cattle, raw materials,
fuel and supplies, food safety, livestock disease, live hog production costs,
product pricing, the competitive environment and related market conditions,
the timing and extent to which beef export markets are reopened, hedging risk,
operating efficiencies, changes in interest rate and foreign currency exchange
rates, access to capital, the investment performance of the Company's pension
plan assets and the availability of legislative funding relief, the cost of
compliance with environmental and health standards, adverse results from
on-going litigation, actions of domestic and foreign governments, labor
relations issues, credit exposure to large customers, the ability to make
effective acquisitions and successfully integrate newly acquired businesses
into existing operations and other risks and uncertainties described in the
Company's Annual Report on Form 10-K for fiscal 2008 and in its subsequent
Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue
reliance on forward-looking statements because actual results may differ
materially from those expressed in, or implied by, the statements. Any
forward-looking statement that the Company makes speaks only as of the date of
such statement, and the Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise. Comparisons of results for current and any prior periods
are not intended to express any future trends or indications of future
performance, unless expressed as such, and should only be viewed as historical
data.
SOURCE Smithfield Foods, Inc.

Jerry Hostetter of Smithfield Foods, Inc., +1-212-758-2100,
jerryhostetter@smithfieldfoods.com, or Robin Derin of Continental Grain
Company-Five Rivers Ranch Cattle Feeding LLC, +1-212-207-5930,
robin.derin@conti.com