U.S. pork producer to be acquired for $4.72 billion
Virginia-based pork producer Smithfield Foods Inc. has agreed to be acquired by Hong Kong-based Shuanghui International Holdings Ltd. for $4.72 billion.
The deal, which has been unanimously approved by both companies’ board of directors, would take Smithfield private and combine the world’s largest pork producer with China’s largest meat producer. It would also be the largest acquisition of a U.S. company by a Chinese company.
The transaction still needs to be approved by Smithfield’s shareholders. It will also require the approval of antitrust regulators and the Committee on Foreign Investment, which reviews transactions with potential national security implications.
During an investor conference call discussing the deal, Smithfield CEO Larry Pope said the acquisition is a great deal for the company’s shareholders and will allow Smithfield to expand its exports to China and Asia.
“This transaction will give Smithfield new channels to market and a strong distribution network in China,” he said. “We expect to help meet the rolling demand for pork in China by exporting high-quality meat products from the United States while continuing to serve markets in the United States and around the world.”
Tang Zhijun, managing director of Shuanghui, said on the call that the company does not intend to make changes to Smithfield’s operations.
“We like it the way it is,” he said. “We will not change the people, the places, the products, the leaders.”
He said broadening the export market benefited both U.S. and Chinese interests.
“Chinese consumers like American pork; U.S. farmers want foreign markets for their pork,” he said.
Shuanghui has agreed to pay $34 a share for Smithfield, a 31 percent premium over Smithfield’s closing stock price on Tuesday. The deal values Smithfield at $7.1 billion after including the company’s debt.