Quebec meat packing giant Olymel will buy one of Canada's largest hog farms out of receivership, after no superior bids emerged.
Olymel will pay $65.25 million for Big Sky Farms, based at Humboldt, Sask., in a deal that will likely close by the end of January, said the receiver, Ernst and Young senior vice-president Kevin Brennan, on Wednesday.
Privately-held Olymel made the offer in October, kicking off a sales process that would have led to an auction if there had been a higher bid.
The Montreal-based company currently does not raise hogs, but operates a large hog-slaughter plant at Red Deer, Alta.
Big Sky entered receivership in early September after piling up $69 million in debt to secured creditors.
Soaring feed costs left the company, and many other hog farms in North America, unable to pay their bills.
A severe drought in the U.S. decimated crops last year, which led to higher costs for grains used to feed pigs.
Manitoba hog producer Puratone Corp. entered court protection from creditors last year, and was purchased by pork processor Maple Leaf Foods.
Another large Canadian hog farm and pork processor, Manitoba-based HyLife, sold a minority stake in the company to Japanese customer Itochu Corp. this week. -- Reuters
Related stories:
Tokyo trader buys stake in pork player HyLife,
Jan. 8, 2013
Farmers left in lurch on sale of Man. hog producer,
Nov. 22, 2012
