Tyson Foods Inc. announced yesterday that it has entered into negotiations with Allen Family Foods Inc., of Seaford, Del., that could lead to Allen's purchase of a Tyson chicken-processing plant on Maryland's Eastern Shore.

"We are interested in looking at the facility with the intent to buy," Leon LaChance, an Allen spokesman, said of the 650-worker Tyson plant in Berlin.

LaChance said Allen would begin its investigation and its due diligence process Monday.

"We will be looking at it with a plan to acquire," he said, but added, "There's a lot of water to go under the bridge before we make a final decision."

If the talks lead to a purchase, he said, Allen would continue the plant operation and retain its employees.

"The employees and the growers are the most important part of the company," he added. "Our intent is for everybody to stay." He estimated that between 90 and 100 chicken growers serve the Berlin plant.

LaChance said Allen has 2,400 workers in the Delmarva region, about 1,600 of whom are in Maryland. The company operates a processing plant near Cordova, in Talbot County, and has a processing plant and hatchery in Hurlock, in Dorchester County.

Tyson disclosed its talks with Allen as it announced that it also would be closing two other poultry plants, in Stilwell, Okla., and Jacksonville, Fla.

Tyson said the Stilwell plant employs about 400 workers and produces deboned leg meat targeted primarily for international markets.

The Jacksonville processing plant has about 550 workers and includes a hatchery and a feed mill. The plant has the capacity to handle 650,000 broilers a week from 89 contract growers.

The closing and possible sale were announced as part of Tyson's disclosure that it has lowered its projected first-quarter and annual earnings.

Tyson, the world's largest meat producer, said it expects to earn 14 cents to 18 cents per share in its first quarter, ending Dec. 28, and to report annual earnings of $1 to $1.10 a share.

Previously, Tyson said it expected first-quarter earnings to be in the range of 22 cents to 26 cents per share, and earnings for the year to be between $1.05 and $1.15. Analysts had expected earnings of 24 cents per share for the quarter and $1.10 for the year.

Tyson acquired meatpacker IBP Inc. last year, moving from being the largest poultry producer into beef and pork.

"Market conditions continue to be challenging going into the holidays, especially in beef processing," said Chairman and Chief Executive Officer John Tyson. "In addition, the winding down of our live swine group is taking longer than expected, and is continuing to generate losses."

Additionally, the company said it plans to eliminate about 560 general, administrative and shared-services positions in operations across 29 states during the next two years. Many cuts will occur from normal attrition and turnover.

Tyson has said it would get out of the live swine business.

Tyson has 300 facilities and offices in 29 states and 22 countries, and 120,000 employees.

Tyson's shares slid 69 cents to $11.26 on the New York Stock Exchange yesterday.