Smithfield agrees to being bought over by China's Shuanghui
25 Sep 2013
China's largest meat processor, Shuanghui International, has agreed to buy the Virginia-based pork giant Smithfield Foods Inc for $7.1 billion, including debt, marking the largest-ever Chinese takeover of a US company.
The Smithfield acquisition is China's largest cross-border deal since CNOOC Ltd paid $15.1 billion last year for Canadian oil and gas producer Nexen Ltd.
Shuanghui will pay $4.5 billion in cash for Smithfield, an iconic name in American kitchens.
Smithfield Foods is the world's largest pork producer and processor. It has facilities in 26 US states, including the largest slaughterhouse and meat processing plant in the world, located in Tar Heel, North Carolina.
Shuanghui International Holdings Ltd is a Hong Kong-based holding company, which owns a variety of global businesses that include food, logistics and flavouring products. Shuanghui International and its subsidiaries are the majority shareholders of the holding company.
''This is a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture,'' said Larry Pope, president and chief executive officer of Smithfield.
The shareholders of Smithfield Foods on Tuesday approved the deal, which is expected to be completed by 26 September.
According to BBC, US regulators had approved the deal earlier this month.
Smithfield shareholders will receive $34 per share in cash for each share of Smith common stock that they own, and the company will continue to operate under its existing brand names as a subsidiary of Shuanghui International.
''The partnership is all about growth, and about doing more business at home and abroad,'' Pope said in a statement.
Smithfield and Shuanghui have said the acquisition will not result in major changes to Smithfield's management or workforce.
Smithfield has more than 46,000 employees, and annual revenue of $13 billion.
It also has operations in Mexico and 10 European countries.
Shuanghui reported $6.2 billion in revenues last year, mainly from meat processing and distribution through 13 Chinese provinces.
China, home to the world's largest population, is also the biggest consumer of pork in the world.