Smithfield Agrees To Takeover By China’s Shuanghui
WASHINGTON (AFP) – Shuanghui International won the largest ever Chinese takeover of a US company Tuesday when shareholders of pork giant Smithfield Foods approved its $7.1 billion offer. The deal locks in for Shuanghui and the giant Chinese market a strong supply from the world’s largest pig raiser and pork processor.
Smithfield said the deal received 96 percent of the votes cast at a special shareholders meeting, despite an earlier challenge by a key investor arguing that it undervalued Smithfield.
Smithfield president and chief executive Larry Pope called the deal “a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture.”
Shuanghui, China’s leading meat processor, will pay $4.5 billion in cash, $34 a share, for Smithfield, an iconic name in American kitchens with $13 billion in annual sales.
Including Smithfield debt, the deal’s value comes to $7.1 billion.
The deal had to clear a number of hurdles, including questions from some politicians worried about Chinese control of a company deeply part of the US food system, and a review by the national security-focused Committee on Foreign Investment in the United States.
CFIUS gave the deal a green light in early September, but then the companies also had to beat objections by hedge fund Starboard Value, a major shareholder, which said that Smithfield if broken up could be worth nearly $11 billion.
Starboard had sought more time to assemble a group of alternative buyers, but was unable to do so before Tuesday’s shareholder vote. Last Friday it admitted failure and announced that it would back the Shuanghui deal.
Shuanghui International is a holding company based in Hong Kong, controlling the Shuanghui Group and Henan Shuanghui Development, which it calls China’s largest meat processing operation.
It reported $6.2 billion in revenues last year, mainly from meat processing and distribution through 13 Chinese provinces.
The Smithfield deal will help Shuanghui satisfy China’s hunger for pork, after the country’s imports more than tripled between 2005 and 2010, to nearly two million tonnes a year.
But US sales to China have fallen over the past year as Beijing said American exporters had to prove their pork free of ractopamine, a synthetic swine feed supplement aimed at boosting the animal’s weight.
China, Russia and the European Union have expressed worries that the supplement raises health risks for consumers.
In February Smithfield announced that it was eliminating ractopamine from its farms and plants expressly to comply with requirements in China.
That opened the way for the Shuanghui deal. Shuanghui has said it would maintain the Smithfield name and its huge farm and processing facilities, as well as the corporate headquarters in Smithfield, Virginia.
“The partnership is all about growth, and about doing more business at home and abroad,” said Pope in a statement.
“It will remain business as usual — only better — at Smithfield, and we look forward to embarking on this new chapter.”
The companies expect to close the deal on Thursday.
Smithfield shares closed unchanged at $33.98 on the New York Stock Exchange.
Sick! I’m disgusted. Especially when he said this:
Smithfield president and chief executive Larry Pope called the deal “a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture.”
WOW! I am just sick about this! I’m with you, I will never buy anything from Smithfield again! Shame on you, QVC for selling their products on your show!
I have eaten my last Smithfield ham. When will this country stop selling out key manufacturing and now food to foreign investors.
There is some irony in that the pork will actually be safer now with the elimination of ractopamine from the pigs diet. I'd also like to point out that I buy Made In America to support American workers, I don't really care where the owners come from.
Where do you think most of that money is going. Another way to take money from our country. I will start looking for local farmers to buy from.
Well, since we are in so much debt to other countries, mainly China, I predict the wholesale selloff of American companies to accelerate.
I will not buy any of these products again.. Sorry stock holders. Not. .
I think Made in the USA is safer than Made in America. Different regulations, with the latter being more safe.
If you want us to read the article, don't post it with white background with light grey letters.
So it takes someone from another country buying an american food company to make our food safer to consume that is F'ed up.
Sure they take the poison out of the pork so that the deal goes thru with China but us Americans they feed the crapp never made a change I won't buy this brands anymore
Why would they do that some things are more important than money like supporting America and the safety of our food industry
Will not buy these products again, hope stockholders are happy!
will not buy from this company ever again. It makes you wonder what’s in the rest of your food that they are not telling you. I buy local, mostly when I can. Buy right from the meat producer like 1/2 of grass fed, finished cows, pork, eggs etc. Sick and tired of getting SHIT from these companies but to sell to Europe they take out the bad stuff. What’s wrong with this country. In bed with the pharmaceutical companies to keep cancer a profitable business in the US
I do not eat Smithfield meats. I’ve read over the last yr about them. Our country is being sold out by white hose in washingto. In trade deals. Wake up america.