UPDATE 1-US pork producer The Maschhoffs to buy chicken firm GNP Company
(Adds company comments on when deal will close, revenues)
By Theopolis Waters
CHICAGO Nov 22 (Reuters) - The Maschhoffs, LLC, the country's largest family-owned pork producer, agreed to buy U.S. chicken company GNP Company for an undisclosed amount, the two companies announced on Friday.
The companies will operate as separate entities following the closing of the transaction, which should be sometime in December, The Maschhoffs spokesman Chuck Sanger told Reuters.
The acquisition will not immediately impact GNP's chicken business or Maschhoffs' pork production operations.
"Our intent is to manage GNP Company as a separate business unit next to our current pork production business," The Maschhoffs Chief Executive Officer Jason Logsdon said in the statement.
"GNP Company will continue to be led by its present management team, with the support of its current team members and contract growers," he said.
The merger will allow both companies to leverage their core strengths and capitalize on growth opportunities, Logsdon said.
"The Maschhoffs are very successful in the pork business, but this is a total change getting into the chicken business," said Ron Plain, livestock economist at the University of Missouri, who was surprised by the deal.
Plain said it is possible that The Maschhoffs were uneasy about having all their money tied up in pork and decided to invest in another meat protein.
"I'm always skeptical when someone gets into a totally new line of business. The Maschhoffs have an excellent track record, but knowing what you're doing with hogs doesn't mean you know a whole lot about the broiler industry," he said.
Sanger said the operations at GNP will be "business as usual" because the Maschhoffs have been "very happy" with how that company has been run.
"There are no plans for an IPO. In terms of additional acquisitions, The Maschhoffs are always looking for other acquisition opportunities that make business sense," Sanger said.
Revenues for The Maschoffs, headquartered in Carlyle, Illinois, were approximately $736 million in 2012 and should be roughly $820 million to $825 million in fiscal 2013, Sanger said.
GNP Company, based in St. Cloud, Minnesota, estimated its 2013 chicken sales at $400 million and has contracts with 350 farms in Minnesota and Wisconsin to produce its birds. GNP was the 18th-largest U.S. broiler producer in 2012, according to WATT PoultryUSA rankings.
Successful Farming's ratings for U.S. Pork Powerhouses listed The Maschhoffs as the fourth biggest U.S. pork producer in 2013 based on its sow herd of 208,000. (Editing by Bob Burgdorfer)
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