HM Unloads Meat Processor

DENVER (AP) – Swift & Co., one of the nation's largest meatpacking companies, said Tuesday it will be sold to a Brazilian company in a $225 million cash deal.


JBS S.A. also will assume $1.2 billion in debt under the agreement with Swift's owners, HM Capital Partners of Dallas and Vail-based Booth Creek Management Corp.


Closing is expected in mid-July and is contingent upon antitrust reviews.


The announcement comes about four months after Swift, which was targeted by a wide-scale immigration raid in December, said it was reviewing its operations and looking at a potential sale.


“Joining J&F to become the world's largest beef and pork processor, Swift should emerge even stronger, and that is good news for our partnership customers, our suppliers and our employees,” Sam Rovit, Swift's president and chief executive officer, said in a statement, referring to JBS S.A.'s controlling shareholder, J&F Participacoes S.A.


Swift, which is headquartered in Greeley about 50 miles north of Denver, is the third-largest U.S. processor of beef and pork and has plants in six states and an operation in Australia. HM Capital acquired Swift from ConAgra Foods Inc. in September 2002.


In December, federal immigration authorities rounded up nearly 1,300 workers at Swift plants in Colorado, Minnesota, Iowa, Nebraska, Texas and Utah. The six plants represented all of Swift's domestic beef processing capacity and 77 percent of its pork processing capacity. The company said last month that it has refilled positions left vacant as a result of the raids.


Swift, which is privately held with publicly issued debt, initially estimated the financial effect of the raids at $30 million but has raised that estimate to as much as $50 million because it took longer than expected to return the beef plants to full production, which caused higher costs and led to lost business opportunities.


In April, Swift said the raids cut into fiscal third-quarter sales and profits at the company's beef and pork operations. The company said it was also beginning to realize benefits of recently enacted cost-cutting efforts.


JBS is the largest beef processor in Latin America with 23 plants in Brazil and six in Argentina. It had nearly $1.8 billion in sales last year.