Pilgrim's Pride Corp. announced that it has signed a definitive agreement to sell its chicken complex in Farmerville, La., to Foster Farms for $80 million, subject to a price adjustment for associated inventory and other reimbursements.

Completion of the transaction is contingent upon customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott Rodino Improvements Act and approval by the U.S. Bankruptcy Court. The transaction is also subject to Foster Farms' receipt of $40 million from the state of Louisiana in order to fund a portion of the purchase price. The sale is expected to be completed within 30 days.

The Louisiana legislature voted on May 7, 2009, to approve the use of government funds to subsidize the purchase of the Farmerville complex by Foster. The agreement between Foster and the state call for Louisiana to provide $40 million toward the purchase of the complex and $10 million, which will be matched by Foster, for capital improvements.

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The U.S. Bankruptcy Court has approved procedures for the sale of the Farmerville complex assets. The sale will be completed via an auction in accordance with Section 363 of the U.S. Bankruptcy Code. The Court set 12 p.m. CST, May 15, 2009, as the deadline for the submission of qualified bid packages and scheduled an auction for 10 a.m., May 18. At that time, the company will sell its assets to Foster Farms or another qualified bidder, if such bidder makes the highest and best offer for the assets. A hearing to approve the sale has been scheduled for 10:30 a.m., May 19.

The Farmerville complex includes a processing facility, a cook plant, two hatcheries, a feed mill, a protein conversion plant and any associated inventory.