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Filed by Tyson Foods, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12(b)
under the Securities Exchange Act of 1934
Subject Company: IBP, inc.
Commission File No. 1-6085
December 19, 2000
Tyson Presentation delivered December 19, 2000
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[TYSON LOGO]
It's what your family deserves
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IBP Acquisition - Unique Strategic Fit
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. Creates the world's largest marketer of beef, chicken and pork
. Point-in-time opportunity to combine unique talents of two industry
leaders, more than triple your revenue, and have a positive impact on
earnings before synergies
[TYSON LOGO] Tyson - Unparalleled ability to develop innovative,
branded food products and market them successfully
through all distribution channels
[IBP LOGO] IBP - Historical leader and innovator in the beef and
pork sectors
. Uniquely positioned to capture significant market potential by
developing innovative, branded beef and pork products for customers in
each distribution channel
. Ability to manage the entire meat case for customers, not a mere
subset
. Strong penetration of all distribution channels: foodservice, retail,
club stores
. Tyson's Foodservice leadership makes them uniquely qualified to
capitalize IBP's Foodbrands market opportunities
. Two strong management teams
. Substantial synergies
. Significantly accretive to EPS and attractive use of free cash flow
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IBP Acquisition - Unique Strategic Fit
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. Creates the world's largest marketer of beef, chicken and pork
- Leading market positions and unrivalled scale to drive
efficiencies
- Increased scale to deal with consolidating customer base
- Management talent to grow and develop all sectors
- Industry leading expertise in research and product
development
- International synergies and broader expansion opportunities
Beef Chicken Pork
[PIE CHART 1] [PIE CHART 2] [PIE CHART 3]
IBP 28% Tyson 25% Smithfield 18%
ConAgra 17% Gold Kist 9% IBP 18%
Excel 18% Perdue 8% ConAgra 11%
Other 37% Other 58% Other 53%
Source: Wall Street Equity Research
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IBP Acquisition - Unique Strategic Fit
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. Tyson has developed one of the most valuable brands in the food industry
. IBP has set themselves on a course to establish the first "national
branded" red meat initiative
. IBP has strong portfolio of Mexican Foods and Ethnic brands
. Tyson is the second largest Flour and Corn Tortilla supplier in the US and
the third largest fresh pasta producer
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IBP Acquisition - Unique Strategic Fit
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. Tyson has the premier frozen warehouse and distribution system in the
country delivering every market in the U.S. a minimum of twice per week.
. IBP, with its 4 new forwarding warehouses, will have the greatest
nationwide refrigerated distribution capability in the industry.
. IBP is the undeniable leader in their segment.
. Tyson is the undeniable leader in ours.
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Major Areas of Synergies
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. Procurement
- Packaging materials:
Tyson and IBP use different
corrugated suppliers and are both
major users of corrugated packaging
- Maintenance and repair items (MRO)
- Operating supplies
- Rolling stock
- Energy
. Logistics / Supply Chain
- Traffic planning and fleet operations
- Ocean freight
- Warehousing operations
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[TYSON LOGO]
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Leverage Opportunities
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. Sales and marketing opportunities
- Combination of chicken, beef, and
pork
- Tyson leadership in Foodservice
- Transfer experience in branding
. Tyson expertise in case ready and value added food categories
. Logistics
- Tyson frozen distribution capabilities
- IBP's fresh distribution network
- Transportation expertise
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Foodbrands Consolidation opportunities
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. Tyson's foodservice leadership position
. Information technology to link independent systems
. Consolidated frozen warehousing
. Purchasing
. Synergies with Tyson's prepared foods divisions
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Attractive Offer for IBP Shareholders
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. Attractive offer price
- $26.00 per IBP share
- 42% premium to IBP stock price on September 29, 2000
. Attractive structure - 50% cash tender offer
- Provides certain value for significant portion of purchase price
- Speed-to-closure - higher net present value to IBP shareholders
- Reduces impact of stock market and share price volatility on purchase
price
- Value of Smithfield's 100% stock offer entirely determined by Smithfield
stock price at closing (following lengthy regulatory approvals and
potential divestitures)
. No financing conditions
- Due to strong balance sheet, Tyson able to finance cash component from
existing sources
. Regulatory review
- No major anti-trust issues
- Competing bidders face significant regulatory hurdles
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Regulatory Environment
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Tyson-IBP Merger Has Little Regulatory Risk
. Does not significantly alter agricultural landscape
- Sourcing of raw materials not materially altered
- Tyson-IBP would in fact offer farmers a stronger processing partner
. As a result, Tyson-IBP merger not expected to face major anti-trust issues
- No overlapping production facilities
- Not hostile to hog producers
. Smithfield offer has substantial regulatory risk
- In order to obtain approval, Smithfield will likely be required to close
or sell facilities
- Farmers (particularly hog producers) and political lobbyists will
strongly oppose integration of the #1 and #2 pork processors
- Smithfield/IBP merger would represent a backwards step for Smithfield's
targeted level of vertical integration. To meet stated targets,
Smithfield may look to further consolidate hog production in-house,
increasing political/regulatory pressures
. Regulatory risk has the potential to materially impact the value of
Smithfield stock consideration
. Regulatory hurdles could also substantially delay completion of a
Smithfield transaction
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Tyson - A Strong Merger Partner
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Strong Balance Sheet and Credit Profile
. Strong balance sheet allows Tyson to fund cash portion of offer price from
existing sources
. Tyson-IBP will be a strong, conservatively leveraged company
- Well positioned to compete in a competitive, consolidating industry
- Strong investment grade credit rating
- Better access to capital, at lower rates
. Combined Smithfield-IBP scenario results in a financially weaker company
- Less diversified
- Limited access to capital and higher borrowing costs
- 100% stock offer positions the combined company as only a mid-investment
grade rating
- 50% cash/50% stock offer has considerable financing risk
X Potential difficulty in accessing capital in an extremely weak
credit market
X Even if financing can be arranged, Smithfield-IBP would likely
retain a border-line investment grade credit rating, and as a
result, face considerable disadvantages in higher borrowing costs
and restrictive covenants
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Tyson - A Strong Merger Partner
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[GRAPH]
[P/E ratio of Tyson and Smithfield from 12/5/97 to 12/7/00]
(a) Based on Factset database. Forward earnings based on monthly calendar
I/B/E/S projections as reported by Factset as of 12/05/00
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Tyson - A Strong Merger Partner
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[GRAPH]
[Tyson indexed price performance from 12/1/97 to 12/3/00
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IBP Acquisition - Unique Strategic Fit
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IBP Overview
. Headquartered in Dakota Dunes, South Dakota, IBP has more than 60
production sites in North America and joint venture operations in China,
Ireland and Russia
. IBP has four business segments:
- IBP Fresh Meats Company: produces boxed and case-ready beef and pork
products
- Foodbrands America: produce higher margin prepared foods such as deli
meats, bacon, sausage, pizza toppings and Mexican entrees
- Consumer Branded Product Group: built the company's new Thomas E.
Wilson market brand
- IBP International Sales Company: exports fresh meat products
Tyson Overview
. Headquartered in Springdale, Ark., Tyson is the world's largest fully
integrated producer, processor and marketer of chicken and chicken-based
convenience foods. Tyson has operations in 18 states and 15 countries and
exports to 73 countries worldwide.
. Tyson has four business segments:
- Food Service: develops, produces and markets chicken products to
restaurant chains, food service distributors and other food
distributors
- Consumer Products: develops and markets a variety of products aimed at
the individual consumer. These products range from fresh chickens to
fully cooked refrigerated and frozen products
- International Group: exports chicken products world-wide
- Swine: feeder pig finishing and marketing of swine to regional and
national packers
- Other: consists of Culinary Foods, Mexican Original and Mallard's Food
Products.
<TABLE>
<CAPTION>
2000 PF Sales by 2000 PF Segment
2000 PF Sales ($ mm)/(a)/ 2000 PF EBITDA ($ mm)/(a)/ Segment ($ mm)/(a)/ Profits ($ mm)/(a)(b)/
<S> <C> <C> <C>
[PIE CHART 1] [PIE CHART 2] [PIE CHART 3] [PIE CHART 4]
Tyson $ 7,158, 30% Tyson $639, 47% Fresh Beef, Pork, Swine $14,474, 61% Fresh Beef, Pork, Swine $467, 49%
IBP $16,600, 70% IBP $709, 53% Chicken $ 6,219, 26% Chicken $272, 28%
Foodbrands $ 2,772, 12% Foodbrands $121, 13%
Other $ 293, 1% Other $ 97, 10%
2000 PF Sales: $23,758 2000 PF EBITDA: $1,348 2000 PF Sales: $23,758 2000 PF Segment Profits: $957
</TABLE>
(a) Source: Company reports and Merrill Lynch estimates; (b) Segment profits
equal gross profit less SG&A
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Summary
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. Attractive offer for IBP shareholders
. IBP acquisition - Unique strategic fit
- Creates world's largest marketer of poultry, beef and pork
- Combines Tyson's product development, branding and distribution
expertise with IBP's strong positions in beef and pork
- Improves customer service by offering comprehensive product selection
- Critical size and scale to be the most efficient provider
- Combines strong management teams
- High quality synergies
- Significantly accretive to EPS
. Tyson - A strong merger partner
- Large capitalization company
- Strong equity market valuation multiples and performance
- Strong balance sheet and credit profile
. Regulatory review
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Forward Looking Statements.
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Certain statements contained in this communication are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating future events and financial performance and
the proposed Tyson acquisition of IBP. These forward-looking statements are
subject to risks, uncertainties and other factors which could cause actual
results to differ materially from historical experience or from future results
expressed or implied by such forward-looking statements. Among the factors that
may cause actual results to differ materially from those expressed in, or
implied by, the statements are the following: (i) the risks that Tyson and IBP
will not successfully integrate their combined operations; (ii) the risk that
Tyson and IBP will not realize estimated synergies; (iii) unknown costs relating
to the proposed transaction; (iv) risks associated with the availability and
costs of financing, including cost increases due to rising interest rates; (v)
fluctuations in the cost and availability of raw materials, such as feed grain
costs; (vi) changes in the availability and relative costs of labor and contract
growers; (vii) market conditions for finished products, including the supply and
pricing of alternative proteins; (viii) effectiveness of advertising and
marketing programs; (ix) changes in regulations and laws, including changes in
accounting standards, environmental laws, and occupational, health and safety
laws; (x) access to foreign markets together with foreign economic conditions,
including currency fluctuations; (xi) the effect of, or changes in, general
economic conditions; and (xii) adverse results from on-going litigation. Tyson
undertakes no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
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IMPORTANT INFORMATION
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LASSO ACQUISITION CORPORATION ("LASSO"), A WHOLLY OWNED SUBSIDIARY OF TYSON
FOODS, INC. ("TYSON") IS COMMENCING AN OFFER FOR UP TO 50.1% OF THE OUTSTANDING
SHARES OF COMMON STOCK, ON A FULLY-DILUTED BASIS OF IBP, INC ("IBP") AT 26.00
NET PER SHARE TO SELLER IN CASH. THE OFFER CURRENTLY IS SCHEDULED TO EXPIRE AT
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON WEDNESDAY, JANUARY 10, 2001, UNLESS
EXTENDED BY LASSO IN ITS DISCRETION. TYSON'S OFFER IS BEING MADE ONLY BY WAY OF
AN OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR
SUPPLEMENTS THERETO AND IS BEING MADE TO ALL HOLDERS OF IBP'S SHARES. MORE
DETAILED INFORMATION PERTAINING TO TYSON'S OFFER AND THE PROPOSED MERGER WILL BE
SET FORTH IN APPROPRIATE FILINGS TO BE MADE WITH THE SEC, IF AND WHEN MADE.
SHAREHOLDERS ARE URGED TO READ ANY RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE
SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS WILL BE ABLE
TO OBTAIN A FREE COPY OF ANY FILINGS CONTAINING INFORMATION ABOUT TYSON, LASSO
AND IBP, WITHOUT CHARGE, AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES
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OF ANY FILINGS CONTAINING INFORMATION ABOUT TYSON CAN ALSO BE OBTAINED, WITHOUT
CHARGE, BY DIRECTING A REQUEST TO TYSON FOODS, INC., 2210 WEST OAKLAWN DRIVE,
SPRINGDALE, ARKANSAS 72762-6999, ATTENTION: OFFICE OF THE CORPORATE SECRETARY
(501) 290-4000.
Tyson and certain other persons named below may be deemed to be participants in
the solicitation of proxies. The participants in this solicitation may include
the directors and executive officers of Tyson. A detailed list of the names of
Tyson's directors and officers is contained in Tyson's proxy statement for its
2001 annual meeting, which may be obtained without charge at the SEC's Internet
site (http://www.sec.gov) or by directing a request to Tyson at the address
provided above.
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Except as disclosed above and in Tyson's proxy statement for its 2001 annual
meeting and other documents filed with the SEC, to the knowledge of Tyson, none
of the directors or executive officers of Tyson has any material interest,
direct or indirect, by security holdings or otherwise, in Tyson or IBP.
This communication is not an offer to purchase shares of IBP, nor is it an offer
to sell shares of Tyson Class A common stock which may be issued in any proposed
merger with IBP. Any issuance of Tyson Class A common stock in any proposed
merger with IBP would have to be registered under the Securities Act of 1933, as
amended, and such Tyson stock would be offered only by means of a prospectus
complying with the Act.
