AT a special meeting, shareholders of Smithfield Foods voted overwhelmingly to approve the proposed strategic combination with Hong Kong's Shuanghui International.
The deal is valued at more than $7 billion. Votes in favor of the deal represented approximately 76% of Smithfield's total outstanding shares of common stock.
Smithfield is the world's largest pork producer and processor, and Shuanghui owns China's largest meat processor.
"We are pleased with the outcome of today's vote and thank all of our shareholders for their support," said C. Larry Pope, president and chief executive officer of Smithfield. "This is a great transaction for all Smithfield stakeholders, as well as for American farmers and U.S. agriculture. 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."
With the Sept. 26 closing of the transaction, Smithfield's common stock ceased to be publicly traded and the company will become a wholly owned subsidiary of Shuanghui International Holdings Ltd. operating as Smithfield Foods. Shuanghui has committed to maintaining Smithfield's current brands and operations upon closing.
Several congressional committees held hearings on the ramifications of the deal, with some legislators and policy experts raising concerns about Chinese ownership of a major U.S. food company.
"It is a sad day for family farmers and consumers when the largest pork processing company in the U.S. is sold to a Chinese interest," said Roger Johnson, president of the National Farmers Union. "Putting ownership of our food system in the hands of other countries does not bode well for the future of our agricultural marketplace. Congress should revisit the official approval process for such transactions with an eye toward assuring that our food systems are more stable, safe and secure and are based on a model of family farmers and ranchers."
Former Smithfield shareholder Continental Grain sold its interest in the company — roughly 6% — shortly after the May 27 announcement of the Shuanghui deal, arguing that Smithfield would be worth more if it were reorganized as three separate companies. Ahead of the shareholder meeting, investor Starboard Value, which owned 5.7% of Smithfield, argued against the deal on similar grounds.
The vast majority of shareholders, however, did not share those concerns: 96% of votes cast at the special meeting were in favor of the deal.
"This transaction will create a leading global animal protein enterprise," Shuanhui CEO Zhijun Yang said. "Shuanghui International and Smithfield have a long and consistent track record of providing customers around the world with high-quality food, and we look forward to moving ahead together as one company."