A central China-based meat processing company is acquiring Smithfield Foods for 4.7 billion U.S. dollars. It’s reported that Shuanghui offered 34 dollars a share for Smithfield, a 31-percent premium to its closing stock price on Tuesday.
The Chinese company will assume 2.4-billion of Smithfield’s debt. This would mark the largest Chinese takeover of a U.S. company, with an enterprise value of 7.1 billion dollars.
According to Smithfield CEO Larry Pope, the acquisition is an opportunity for growth down the road. He says Smithfield’s operations in the U.S. and abroad won’t see much change if any. He adds that the deal isn’t a strategy to import Chinese pork into the U.S. but to export pork out of the U.S. Shuanghui Chairman Wan Long says the move provides Smithfield the opportunity to expand its offering of products to China and provides Shuanghui with access to high-quality, competitively-priced and safe U.S. products, as well as Smithfield’s best practices and operational expertise.
The acquisition, pending regulatory approval, is expected to be finalized in the latter part of the year.