The directors of the Colorado based meatpacker released a statement which says selling the company is one alternative they're exploring. The board says it's also looking at possible mergers or other new partnerships. Steve Kay writes a newsletter called Cattle Buyers Weekly. He was the first to report the possible Swift sale.
"Oh I have no doubt that it'll be sold," says Kay. "In what form is obviously going to be the intriguing question."
Kay says the company could be sold in one piece or it may be broken up.
Swift is the nation's third largest beef and pork meatpacker. It has four cattle plants and three pork operations in the U.S. as well as several plants in Australia.
"I have no doubt that it'll be sold."
Kay says meatpacking insiders have expected the company to be sold. The investment business HM Capital Partners purchased Swift just over four years ago. Kay says it's normal practice for these types of leveraged buyouts to be resold. Kay says he believes however the immigration raid probably accelerated the timetable.
"I think the damage has been perhaps a little bit more severe than they were saying publicly," says Kay. "So I certainly think it was a factor in their decision to seek a buyer or buyers for the business or parts of it."
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Swift officials said the raid cost the company $30 million but they expected to make that up by late spring. Last week the company announced it was cutting 58 jobs at its corporate offices.
One of the company's largest operations is in Worthington. The plant can process 17,000 hogs a day and employs more than 2000 workers. Kay says the Worthington plant may come through a sale in fairly good shape. He says it's one of Swift's most efficient and desirable operations.
"The work force is highly regarded in Worthington and the Worthington plant is a considerable asset for any potential buyer who would be very keen to get that plant and keep it running," says Kay.
The plant is the largest employer in Worthington and an important part of the region's economy. Worthington Mayor Al Oberloh says reports of a possible sale concern him.
"By far their payroll is the absolute largest, I would say probably the largest in southwest Minnesota, I believe in the $80 million range annually," says Oberloh. "So that would definitely have an impact."
After the immigration raid some stores reported reduced sales. Hog producers lost money because after the raid the Swift plant ran at reduced levels and needed fewer pigs. Don Buhl raises hogs near the town of Tyler and serves on the board of the National Pork Producers Council. He says he hopes the Worthington plant stays open.
"That's a plant that's been improved a lot over the recent years," says Buhl. "So hopefully there's a willing buyer and somebody that will come in and be a good outlet for hogs. Or perhaps Swift will continue to operate it I guess I'm not sure that decision has been made yet."
There's a lot of speculation which companies might be interested in buying Swift, with most of it centering on Smithfield Foods. Officials there have said in the past they're interested in buying the Swift plants.
Last fall Smithfield announced it intended to build a $200 million cattle processing plant in the Oklahoma Panhandle. Many people in the meatpacking industry saw that as a challenge to Swift since it also has packing plants in that region.
Swift has not set any deadlines for taking action. The company has hired the Wall Street financial company JPMorgan to help it review its options.