Shuanghui International Holdings Ltd announced today of its plans to acquire Smithfield Foods, Inc. (NYSE:SFD) The acquisition is expected to cost China’s biggest pork producer $4.72 billion and will help the company to up the supplies in China, the biggest consumer of the meat.
Shuanghui Terms of the deal
Shuanghui, which is a parent form for Henan Shuanghui Investment & Development (SHE:000895), will pay $34 a share. The announcement of the sale of Smithfield Foods, Inc. (NYSE:SFD), which is a pork and meat producer, could be heard by Wednesday morning. The majority of shareholders were demanding the split up of the company. According to the sources, the bid by Shuanghai is around 30 percent more than the Tuesday close price of $25.97 for Smithfield. The Committee on Foreign Investments in the United States will look into the details before the matter is finalized.
The Board of Directors at Smithfield are mainly anxious about the review and whether the deal could pass the scrutiny, according to a source. The reverse backup fee is the structure of the deal if the deal fails subjected to regulatory issues.
Shuanghui Management take on the deal
“This is a great transaction for all Smithfield stakeholders, as well as for American farmers and U.S. agriculture,” said C. Larry Pope, president and chief executive officer of Smithfield. He further said that with hard work and determination, Smithfield has been turned out to be world leading and one of the most trusted vertically integrated companies
Shuanghui chairman Wan Long said that after the acquisition, Smithfield Foods, Inc. (NYSE:SFD) will be able to enhance its product offerings in China with the help of the Shuanghai distribution network. The benefits, which will be available to Shuanghai after it acquires Smithfield will be to include high quality, competitively priced and safe U.S. products. Additionally, Shuanghai will also get access to the best practices and operational expertise of Smithfield.
Mr C. Larry Pope will continue as the president and chief executive officer of Smithfield Foods, Inc. (NYSE:SFD).
About Smithfield Foods And Shuanghui Group:
Smithfield Foods, Inc. (NYSE:SFD) was established in 1936 and the market capitalization of the company stands at $3.6 billion.
Shuanghui Group is located in Henan Province in Central China, and is the holding company for Henan Shuanghui Investment & Development (SHE:000895) The Henan Shuanghai Investment & Development Co. is listed on the Chinese city of Shenzhen. The product of Shuanghui is sold under the brand name of Shineway and is believed to be largest pork producer.