Dutch food company Nutreco Holding and Plukon Royale, part of Royal Cebeco Group, announced today (Monday) that they have reached agreement in principle on the sale of Nutreco's Pingo Poultry processing businesses to Plukon Royale.

The fixed selling price is €31m (US$37.7m), which is €11m below book-value. In addition to this selling price, the parties have agreed an earn-out over the coming three years.

Pingo Poultry specialises in fresh pre-packed products for retail customers and fresh and frozen poultry meat for the food industry. In 2004 its processing revenues totalled €190m. Pingo Poultry has two sites, Goor and Mierlo in the Netherlands and one in Maasmechelen in Belgium, with approximately 1,000 employees between them. The company staff will be transferred to Plukon Royale.

The transaction is subject to approval from the relevant competition authorities and approval from and consultation with works councils and trade unions.

"With this transaction we have been able to create a future for Pingo Poultry within a new and leading European poultry processing business, which will supply a wide range of high quality products to retail, food service and food industry," said Nutreco's COO Juergen Steinemann:

The sale of Pingo Poultry's processing business fits within Nutreco's previously announced strategy 'Rebalancing for Growth', the company said. This strategy puts a clear focus on the growth of Nutreco's animal nutrition and fish feed business and the reduction of financial exposure to the earnings volatility of its food businesses. Nutreco's fully integrated Sada poultry processing business, which holds a strong position on the Spanish market, will remain a strategic part of the Nutreco group.