090307 Tyson - XL Foods Beef Deal Going Forward

The sale of Lakeside Farm Industries by Tyson Foods to XL Foods is expected to be completed by mid-March, officials from both companies reported recently.

The transaction, which was first announced in June 2008, is proceeding now that the Canadian Competition Bureau has indicated it will not challenge it. XL Foods Inc. is the largest Canadian owned and operated beef processor.

"We're pleased the Competition Bureau has finished its review and we're ready to move forward with the sale," Leland Tollett, interim president and chief executive officer of Tyson Foods, said in a statement last week. "As we've previously stated, Lakeside is one of Canada's leading beef processing operations, but it simply no longer fits our company's long-term strategy." Tyson's current international focus is primarily on expanding the company's presence in Asia, Mexico and South America.

"While Tyson will no longer own a beef plant in Canada, we fully intend to continue buying Canadian cattle to supply some of our U.S. beef operations, such as our beef complex in Pasco, Washington," according to Tollett.

The $105.5 million (Canadian) sale of Lakeside includes $55.5 million that will be paid at closing. The remaining $50 million, plus interest, will be paid over a five-year period following closing. XL is also buying cattle, feed, fertilizer and packaging inventories as part of the transaction.

Lakeside Farm Industries, based in Brooks, Alberta, is a diversified agribusiness involved in cattle feeding, slaughtering and processing, as well as retail fertilizer production and farming. Lakeside employs 2,300 people. The Lakeside beef plant currently has the capacity to slaughter and process 4,700 cattle per day.

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