Smithfield Foods shareholders approve Chinese purchase By David Pierson September 24, 2013, 9:44 a.m. Shareholders of Virginia-based pork producer Smithfield Foods Inc. approved a $4.7 billion takeover by China’s Shuanghui International Tuesday, clearing the last major hurdle for a deal that would mark the largest purchase of an American company by a Chinese firm. More than 96% of votes went in favor of the sale, which was announced in May and required federal regulatory approval. The deal was nearly scuttled by activist hedge fund Starboard Value LP, which tried to find alternate buyers. With shareholder approval, the deal could be finalized by Thursday. “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 of Smithfield, in a statement. “The partnership is all about growth, and about doing more business at home and abroad. It will remain business as usual — only better — at Smithfield, and we look forward to embarking on this new chapter." Shuanghui agreed to pay a 31% premium for Smithfield at $34 a share, which was a touch above what the stock was trading for by midday Tuesday. In doing so, China’s biggest meat processor will take the company private and retain Smithfield’s management structure. The deal had raised concerns in Washington about American food security. China is on a meat-eating binge, doubling their consumption in the last two decades of economic growth. The world’s second-largest economy is scouring the globe for more resources. At the same time, China has been plagued by food processing scandals at home. As a result, Chinese consumers favor foreign products, which will benefit Smithfield sales.
Posted on: Tue, 24 Sep 2013 17:38:28 +0000
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