Sara Lee Reaches Agreement with Smithfield for European Meat Sale

08/05/06 Negotiating sale of European meats business with Smithfield Foods, Inc.; Consultation with employee representatives from appropriate works councils to begin

Sara Lee Corporation has announced that it has entered into an exclusive negotiation period regarding the sale of its European meats business with Smithfield Foods, Inc., the world’s largest pork processor and hog producer.  As the parties continue their discussions, Sara Lee will consult with employee representatives from the appropriate works councils regarding the potential sale.
 
“The intended sale of the European meats business is the latest example of simplifying our portfolio as we transform Sara Lee into a world-class, integrated operating company,” said Brenda C. Barnes, chairman and chief executive officer of Sara Lee Corporation.  “We look forward to collaborating with the works councils and employee representatives associated with this business.”
 
Headquartered in Hoofddorp, the Netherlands, Sara Lee’s European meats business had $1.1 billion in sales in fiscal 2005 and holds its largest positions in France, Benelux and Portugal with popular brands such as Aoste, Justin Bridou, Cochonou and Nobre.  The organization employs approximately 4,500 people. 
 
Based in Smithfield, Va., Smithfield Foods’ collection of brands includes Smithfield, Smithfield Lean Generation, John Morrell, Gwaltney, Patrick Cudahy, Krakus and Stefano’s.  Outside the United States, Smithfield owns subsidiaries in France, Poland, Romania and the United Kingdom, and operates joint ventures in Mexico and China.  Smithfield employs more than 51,000 people worldwide.
 
“Regardless of whether we sell this business, we remain confident in our ability to generate in excess of $3 billion in after-tax proceeds from divesting non-core businesses, including the planned spin-off of our Branded Apparel, Americas/Asia business later this year,” added Barnes.