Hog Jeopardy

Answer: $460 million.

Question: What is the price of the country's second largest hog operation?

Smithfield Foods recently offered $460 million for the purchase of MurphyFamily Farms of Rose Hill, NC. The offer includes 10 million shares ofSmithfield Foods common stock and the assumption of $170 million term debtand other liabilities. Murphy Family Farms markets production from about325,000 sows located throughout the U.S.

A large pork packer, Smithfield Foods is the largest U.S. producer of hogswith about 350,000 sows owned by its two subsidiaries, Carroll's Foods andBrown's of Carolina. Smithfield reports that it intends to keep MurphyFamily Farms as a separate unit like Carroll's and Brown's.

Announcement of the pending purchase created waves, however. With Murphyhogs under its wing, Smithfield will account for about 10 percent of the country's hog production. The American Farm Bureau Federation has called for aninvestigation by the U.S. Department of Justice to ensure that antitrustlaws are not being broken.

In addition, the Iowa Attorney General's office is checking into a possibleviolation of a state law prohibiting packers from owning livestock in thestate.

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