Largest US pork processor sold to Shuanghui

Smithfield Foods, the largest pork processor in the US, has been acquired by Chinese company Shuanghui International Holdings. The two companies have entered into a definitive merger agreement that values Smithfield at US$7.1 billion, inclusive of Smithfield’s net debt.

Shuanghui is the majority shareholder of Henan Shuanghui Investment & Development Co., China’s largest meat processing enterprise and China’s largest publicly traded meat products company.

Under the terms of the agreement, Shuanghui will acquire all outstanding Smithfield shares for US$34 per share in cash. The purchase price represents a premium of 31% over Smithfield’s closing stock price on 28 May, the last trading day prior to the merger announcement.

“It will be business as usual - only better - at Smithfield,” said C Larry Pope, President and CEO of Smithfield. “We do not anticipate any changes in how we do business operationally in the United States and throughout the world. We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui.”

“Smithfield is a leader in our industry and together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the United States and around the world,” said Shuanghui chairman Wan Long.

“The acquisition provides Smithfield the opportunity to expand its offering of products to China through Shuanghui’s distribution network. Shuanghui will gain access to high-quality, competitively priced and safe US products, as well as Smithfield’s best practices and operational expertise.”

Understanding the importance of preserving Smithfield’s heritage, values and connections with the communities it serves, Shuanghui has pledged to maintain Smithfield’s headquarters in Smithfield, Va., and to continue Smithfield’s philanthropic support of community initiatives and investments in sustainability.

Shuanghui will honour the collective bargaining agreements in place with Smithfield’s represented employees, as well as existing wage and benefit packages for non-represented employees. Under the agreement, there will be no closures at Smithfield’s facilities and locations, and Smithfield’s existing management team will remain in place.