010101 IBP Signs Agreement to be Acquired by Tyson

Dakota Dunes, SD - IBP, inc. announced that it has entered into a definitive merger agreement with Tyson Foods, Inc. Under the terms of the agreement Tyson will acquire all of the outstanding shares of IBP in a cash tender offer, stock exchange offer and merger valued at approximately $4.7 billion, which includes the assumption of and/or refinancing of approximately $1.5 billion of IBP debt and other obligations. Tyson will pay $30.00 for each share of IBP common stock, with 50.1% of the consideration in cash and the remainder in Tyson Class A common stock. The stock portion of the consideration is subject to a maximum exchange ratio of 2.381 and a minimum exchange ratio of 1.948 Tyson Class A shares if Tyson's average trading price for an agreed to period of time is outside the range, or “collar” of $12.60 and $15.40.

Tyson's outstanding cash tender offer for 50.1% of IBP's shares, currently scheduled to expire at midnight on Tuesday, January 16, 2001, will be amended to reflect the terms of the agreement. Tyson intends to commence promptly an exchange offer for all IBP shares not purchased in the cash tender offer. In the exchange offer, each IBP share will be exchanged for Tyson Class A shares valued at $30.00, subject to adjustment if the average trading price of Tyson Class A shares is outside the collar.

The transaction, which is currently undergoing regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, is expected to close within the first quarter of 2001.

In conjunction with entering into the agreement with Tyson, IBP terminated its merger agreement with Rawhide Holdings Corporation, a wholly owned subsidiary of DLJ Merchant Banking Partners III, L.P. Under the merger agreement with Rawhide, IBP shareholders would have received $22.25 per share in cash.

The IBP board of directors, based on the unanimous recommendation of a special committee composed of all of the directors of IBP not employed by IBP or DLJ, approved the termination of the Rawhide merger agreement and the execution of the Tyson merger agreement, and will recommend that IBP shareholders tender their shares into the amended Tyson cash tender offer and, to the extent not purchased in the cash tender offer, into the Tyson exchange offer.

J.P. Morgan Securities Inc. and Peter J. Solomon Company Limited advised the special committee of IBP and provided fairness opinions regarding the transaction.

“We believe IBP and Tyson will make a strong team,” Robert L. Peterson, IBP chairman and chief executive officer, said. “The combined expertise and resources of these two great companies will benefit shareholders, as well as food customers and consumers throughout the world.”

IBP will be filing an amendment to its Schedule 14d-9 with the Securities and Exchange Commission with respect to the amended Tyson tender offer, which will contain the formal recommendation of the Board of Directors regarding the tender offer and full description of the reasons therefor.

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