Smithfield Foods Offers to Acquire Ibp In Stock-for-Stock Transaction Valued At $25 Per Share

   November 13, 2000 / Smithfield Food / Press Release / -- Smithfield Foods, Inc. (NYSE: SFD) announced today that it has offered to acquire all of the outstanding shares of IBP, Inc. (NYSE: IBP) through a tax-free merger in which IBP shareholders would receive $25 per share payable in Smithfield Foods common stock at an exchange ratio based on the average price of Smithfield Foods shares for a period prior to the closing. The proposed transaction would have a total transaction value of approximately $4.1 billion, including the assumption of $1.4 billion of IBP debt. This represents a 19.8% premium over the closing price of IBP common stock on Friday, November 10th , and a 36.5% premium over the closing price of IBP stock on September 29, 2000, the day prior to the company’s announcement that it had agreed to a highly-leveraged management buyout from a group comprised of affiliates of Donaldson Lufkin & Jenrette, certain members of IBP senior management, Archer Daniels Midland Company and Booth Creek Partners. The buyout transaction would cash out all IBP stockholders except the buyout group at a price of $22.25 per share. Smithfield Foods’ offer represents a 12.4% premium over the management buyout group’s offer price.

   The number of Smithfield Foods shares to be exchanged for IBP shares will be subject to a 10 percent collar, both upward and downward, based upon the $31.63 closing price of Smithfield common stock on November 10, 2000. The proposal provides for a maximum exchange ratio of 0.878 if the pre-closing average trading price of Smithfield Foods stock, for a period prior to the closing, is below $28.46 and a minimum exchange ratio of 0.719 if the pre-closing average trading price, for a period prior to the closing, is above $34.79. The exchange ratio based upon Friday’s closing price was 0.791.