Source: Rita Jane Gabbett, MEATINGPLACE, 12/6/11

National Beef Packing Company, LLC and its major owner U.S. Premium Beef, LLC (USPB) announced the company’s majority owners have entered into a Membership Interest Purchase Agreement with Leucadia National Corporation under which Leucadia will acquire approximately 79 percent of the outstanding ownership interests in National Beef.

The operations and management structure of National Beef will remain unchanged. Tim M. Klein, president and CEO of National Beef, will continue in that role upon completion of the transaction.

“I look forward to Leucadia joining our ownership group and bringing its unique perspective to our industry. The addition of Leucadia will widen the scope of opportunities available to us and will further strengthen our ability to expand our business and solidify our position as the premier global beef processor,” said Klein in a statement.

“This transaction will enable us to address the liquidity desires of USPB’s diverse producer ownership base while maintaining our highly successful cattle supply system and a sizable investment in beef processing,” said Steve Hunt, CEO of USPB. "Leucadia is a diversified holding company engaged in a variety of businesses; its broad and deep experience will enhance our partnership. Our goals for the future of National Beef are aligned and we look forward to a long and successful partnership.”

Leucadia is a diversified holding company with investments in a broad array of industries from pre-paid phone cards to lumber and oil and gas drilling.   

U.S. Premium Beef, LLC is a producer-owned beef company formed in 1996 and is the current majority owner of National Beef. USPB is made up cattle ranchers and feedlot operators and has in the past furnished about 20 percent of the cattle used by National Beef.

The transaction is subject to certain conditions and will require customary regulatory approvals. It is expected to close by the end of calendar year 2011.

National Beef is based in Kansas City, Mo. with operations in Liberal, Dodge City, and Kansas City, Kan.; Brawley, Calif.; Hummels Wharf, Penn.; Moultrie, Ga.; and St. Joseph, Mo. National Beef, with approximately 9,100 employees, processes and markets fresh beef, case-ready beef, beef by-products and wet-blue leather for domestic and international markets. In fiscal year 2011, National Beef generated sales of $6.8 billion.

In 2008, JBS S.A. made a bid to buy National Beef, but the U.S. Department of Justice filed a suit to block the deal and JBS withdrew the offer in February 2009.  In December 2009 National Beef shelved a previously announced initial public offering amid waning confidence in the IPO market.

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