US pork producer Smithfield Foods has announced that it was the successful bidder at an auction to acquire Farmland Foods, the pork production and processing business of bankrupt Farmland Industries, for US$367.4m in cash.

Smithfield said it will also assume certain Farmland liabilities, including the pension obligations, and associated assets, of both Farmland Foods and Farmland Industries, as well as certain post petition liabilities. Smithfield's agreement to assume the pension obligations was valued at $90m by the debtor.

Smithfield outbid rival Cargill at an auction held at Farmland headquarters in Kansas City, Missouri on Sunday, under auction and bid procedures approved by the United States Bankruptcy Court.

Smithfield's successful bid is subject to Bankruptcy Court approval at a hearing to be held on 28 October, and is subject to certain other customary conditions. Smithfield said it has previously received antitrust clearance for the acquisition and expects to complete the transaction early in its fiscal third quarter.