Media Centre
2003/09/25

Maple Leaf Announces Definitive Agreement to Purchase Schneiders

TORONTO, ONTARIO--Maple Leaf Foods, Inc. (TSX: MFI) ("Maple Leaf") today announced that it has executed a definitive agreement with Smithfield Foods, Inc. (NYSE:SFD) ("Smithfield"), of Smithfield, Virginia to purchase Schneider Corporation ("Schneiders"), of Kitchener, Ontario for US$378 million (approximately CDN$515 million), including the assumption of Schneiders' outstanding debt. The transaction is expected to close by year-end or early 2004, subject to normal conditions including obtaining clearance for the transaction from the Canadian Competition Bureau.

Schneiders is one of Canada's largest producers of premium branded quality food products, specializing in packaged processed meats, poultry and grocery products. For the year ended April 27, 2003, Schneiders had sales of CDN$1.24 billion and earnings from operations of CDN$54.1 million. Schneiders employs approximately 5,000 people at its 20 facilities across Canada.

"We are very excited about the opportunity to bring together two outstanding Canadian food companies," said Michael H. McCain, President and Chief Executive Officer of Maple Leaf. "Schneiders has a long history of success built on the strength of its brand, heritage and people. Our vision is to create the world's premier consumer foods company, by building on the strengths of both organizations. This means continuing to provide Canadian consumers with the highest quality innovative food products while expanding our global reach."

"This is an excellent strategic fit that will reward our employees, customers and consumers, and strengthen our contribution to the Canadian economy," said Douglas W. Dodds, President and Chief Executive Officer of Schneiders. "Respecting the consumer loyalty and equity behind our brands and the strength of our shared values and businesses will provide the foundation from which we unite our two organizations and realize the many opportunities ahead."

Upon closing, a Merger Leadership Council will be established, Chaired by Douglas Dodds and including equal representation from both companies, to identify opportunities to enhance business performance and unite the two companies.

Maple Leaf intends to fund the transaction with debt. Over the next several months, the Company will give consideration to issuing $100 million to $200 million of treasury shares as part of a longer-term financing plan. The Ontario Teachers' Pension Plan Board has provided Maple Leaf with a standby commitment to purchase, at Maple Leaf's option, up to $150 million of treasury shares at any time within twelve months of closing of the transaction. Pricing of shares under this arrangement would be at a 6% discount to the market trading price of Maple Leaf common shares prior to an issue. Should Maple Leaf decide to issue treasury shares, it would favour issuing shares into the broader market.

Media briefing: A Media Briefing will be held today at 1:00 p.m. (Toronto time) at Maple Leaf Foods, 30 St. Clair Avenue W, 16th Floor, Toronto. Media wishing to participate via conference call can dial in at 1-800-765-7646.

Investor Call: An investor conference call will be held today at 2:30 p.m. (Toronto time). To participate in the call, please dial in to 1-800-355-4959 or 416-695-7848. For those unable to participate playback will be made available at 1-888-509-0081 or 416-695-5275.

Maple Leaf Foods Inc. is a leading Canadian food processing company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 18,000 people at its operations across Canada, and in the United States, Europe and Asia. The Company reported sales of $5.1 billion in 2002.


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