CHICAGO U.S. agribusiness giant Cargill Inc said on Thursday it bought a former AFA Foods Inc ground beef processing plant in Fort Worth, Texas, for $14.1 million, in a move that will add to its already strong position in the U.S. and Canadian consumer market.
Based in King of Prussia, Pa., AFA filed for chapter 11 protection in the U.S. Bankruptcy Court at Wilmington, Del., on April 2. Of those assets, Cargill bid only for AFA's Fort Worth plant. The transaction received court approval on Thursday and the sale is expected to close next week, Minneapolis-based Cargill said in a statement.
Cargill plans to keep the approximately 250 full-time ground beef production jobs at the facility and make further investments to boost the plant's competitiveness.
The Fort Worth plant will produce ground beef patties and a variety of ground beef packaged products for both the retail and food service sectors, the company said.
"This is a strategic acquisition that complements our existing beef production and distribution," said Mary Thompson, president of the Cargill Value Added Meats Food Service business headquartered in Wichita, Kansas.
Cargill's meat division employs more than 34,000 people, and has more than 30 facilities, in its North American businesses. The position of Texas as a top producer of beef cattle added attraction of the deal, the company said.
In the past 15 months Cargill has announced approximately $100 million of investments in Texas supporting the company's meat businesses, including acquisition of a hog production facility near Dalhart, construction of a livestock feed production facility at Bovina and the Fort Worth beef processing facility. For fiscal 2012 and 2013, Cargill has also earmarked $20 million in investments for its Plainview and Friona, Texas, beef processing facilities, the company said.
(Editing By Peter Bohan; Editing by Ed Davies)