Perdue acquires Md. rival

January 06, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer Sun staff writer Kim Clark contributed to this article.

Perdue Farms said yesterday that it has completed the acquisition of Eastern Shore-based competitor Showell Farms, creating the nation's third-largest poultry company, processing more than 11 million chickens each week.

The acquisition also provides Perdue a bigger presence in Florida, where Showell has operated for 20 years. Perdue, a 75-year-old company with processing plants in six states, has sold its products there only since January 1994.

"The acquisition provides a tremendous opportunity for all who work for the two companies," said James A. Perdue, chairman of the Salisbury-based firm. "For Perdue, it is clearly a significant part of our long-term growth plan."

Mr. Perdue added that there are no plans to close Showell facilities despite an overlap in states such as Maryland and North Carolina. Showell operates five plants in four states and is developing a South Carolina plant scheduled for completion this year.

Terms of the acquisition involving the two privately held firms were not disclosed. The two sides had been discussing either a sale or merger since November.

Before its sale, the 87-year-old Showell, just a few miles northeast of Salisbury, was the nation's 10th-largest poultry firm, employing 4,800 and processing 3 million chickens a week. Perdue employs 13,800 and processes eight million chickens and 3.1 million pounds of turkey weekly.

"Since Perdue is four times larger than Showell, working out a merger with both parties having an equal say was not feasible," Showell Farms President Alan Guerrieri said in a memorandum to employees yesterday. "Nor did I wish to have a minority interest in a privately held company. After much thought and consideration, this was the best alternative."

Although in the past Perdue and other food industry concerns have expanded through traditional means of building new plants, more companies today are electing to acquire existing firms because it is often less expensive, industry analysts said. Buying existing companies also provides in-place production facilities, distribution methods and brand-name recognition.

In the case of the Perdue/Showell merger, Perdue will continue to sell products under Showell's Cookin' Good brand.

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