Desc S.A. de C.V. Announces Negotiations to Sell Its Poultry and Animal Feed Business

Business Wire, Nov 8, 1999

MEXICO CITY--(BUSINESS WIRE)--Nov. 5, 1999--

Desc S.A. de C.V. (NYSE:DES) (BMV:DESC) announced Friday that it has entered into a definitive agreement with Industrias Bachoco S.A. de C.V. (NYSE:IBA) (BMV:BACHOCO UBL), to sell 100% of the shares of Grupo Campi, S.A. de C.V., its poultry and animal feed business. Bachoco submitted the most attractive offer during a competitive sale process.

The total amount paid for Grupo Campi is US$155 million, which included approximately US$27 million in net debt. Proceeds from the sale will be mainly used to pay down debt related to the purchase of Authentic Specialty Foods, Inc. held in June 1998.

Grupo Campi's 1998 sales were US$208 million, with an EBITDA of US$37 million. Grupo Campi's 7% national market share makes it the fourth largest poultry producer in Mexico. In addition, Grupo Campi is one of Mexico's principal producers of animal feed. Its operations are mainly situated in the Yucatan Peninsula, Southeastern states and Central Mexico.

Wth this transaction DESC reinforces its strategy to focus on branded products in its food sector, with a strong market share in Mexico and the Southwestern United States.

This transaction will be subject to approvals by the corresponding Government authorities as required by law.