Cargill selling pork unit to JBS USA Pork

Cargill has agreed to sell its U.S. pork business to JBS USA Pork for $1.45 billion, a deal that would combine two of the country's largest pork processors.

With the sale, Minnetonka-based Cargill would exit a business it has been in since 1971, while Brazilian meat giant JBS would get more vertically integrated in U.S. pork, becoming a significant owner of sow farms and feed lots.

The companies announced the deal Wednesday, though the sale is subject to regulatory review and approval.

Included in the transaction are Cargill's meat processing plants in Ottumwa, Iowa, and Beardstown, Ill., which last year together processed 9.3 million hogs. JBS will also get five Cargill feed mills and four hog farms. Two feed mills are in Missouri; one each is in Iowa, Arkansas and Texas. Two of the hog farms are in Arkansas, the other two in Oklahoma and Texas.

"We were not looking to sell our pork business, however JBS approached us with an offer that we had to consider," Cargill spokesman Mike Martin said in an e-mail. "We remain committed to our remaining animal protein businesses around the world and continuously evaluate opportunities that could provide long-term, profitable growth."

Cargill is a major force in the U.S., Canadian and Australian beef business, and is big in chicken processing in Asia, Europe and Latin America. The agribusiness giant isn't a player in the international pork business.

Cargill's fresh pork operation employs 5,100 people, primarily at the processing plants in Iowa and Illinois, both of which Cargill bought in 1987. The company's Dalhart, Texas, sow farm covers 22 acres and can house over 60,000 hogs.

Smithfield, JBS, Tyson and Cargill are known as the largest U.S. pork processors, with Smithfield being the biggest sow owner in this country and the world's pork juggernaut.

Cargill was the nation's eighth largest "Pork Powerhouse" in 2014 when measured by number of hogs, according to an annual ranking by Successful Farming. Cargill had 161,000 sows at the end of 2014. JBS didn't appear in Successful Farming's 2014 ranking.

JBS entered the U.S. pork market by acquiring Swift & Co. in 2007. The company has three major pork processing facilities, including a plant in Worthington, Minn.

"The strengths of JBS and Cargill pork businesses are complementary," Todd Hall, Cargill's senior vice president, said in a press statement. "Together, they promise to offer enhanced service to customers and more opportunities for employees and hog producers."

Mike Hughlett • 612-673-7003