MORRELL SELLS THREE MEAT DIVISIONS

CINCINNATI -- John Morrell & Co. here has sold three of its branded processed meats businesses and its Nathan's Famous licensing rights to SMG, a new group consisting of former Morrell managers.

ccessor has not been named at Morrell.

The businesses Morrell sold to SMG are: Liguria, Humboldt, Iowa, a supplier of specialty Italian dry sausages; Mosey's, Bloomfield, Conn., a producer of corned beef and pastrami, and Scott Petersen Inc., Chicago, a maker of hot dogs, sausage and luncheon meat items. The Nathan's part of the transaction involves the licensing rights to the trademark for packaged meats sold to supermarkets.

Morrell, a 165-year-old company with anticipated sales of $1.6 billion this year, is a wholly owned subsidiary of Chiquita Brands International.

Don Breen, senior vice president for Morrell, said the three businesses represented only a small part of the company's operations and were handled separately from Morrell's other product lines, which include a wide range of branded and private-label meats.

"They were pretty much run as separate businesses," said Breen.

While Breen declined to disclose financial details of the transaction, he said the proceeds would be invested back into the company to further capital improvement projects and other marketing efforts under way. The company has recently experienced considerable private-label growthl, an area in which it plans to expand its efforts, said Breen.

The transaction is financed by Chemical Venture Partners, New York.

Explaining the reasons for the deal, Shea said, "There is a synergy to these four premium product lines that we can turn into a strong, unified focus, opening up tremendous opportunities across the United States. Each brand is a leader in its respective market segment. We want to continue to penetrate core areas and aggressively expand our brands into new markets."

Shea described SMG as "growth-oriented company" with plans to "become an important player in the specialty food sector with recognized, branded food products."

Breen said over the past three years, Morrell has undergone considerable restructuring to make it more competitive in the marketplace. The company wants to become a lower-cost producer and be more efficient in the delivery of products, said Breen. "And part of that restructuring has included selling off businesses not mainstream to John Morrell."

It also has included investing money in plant improvements and forging agreements with local government and labor groups to keep its Sioux City, Iowa, plant viable. The plant, which employs 1,200 people and is used to manufacture fresh and processed meats, had been scheduled to close because it wasn't financially competitive. However, due to a long-term labor agreement the company negotiated with the workers there, the plant will remain open.

Additionally, last month the company reorganized its sales force into three groups. One sales division targets the market by geographic territories and sells branded meats. Another is a national account sales group, which focuses on channels of business, such as private label, club stores, military sales and cooperative warehouses. A third sales group sells fresh meats only.