ACCORDING to documents filed Sept. 26 with the U.S. Securities and Exchange Commission, Virginia-based Smithfield Foods has completed its merger with China's Shuanghui International. Approved by shareholders Sept. 24, the $34 per share deal makes the world's largest pork producer and processor a wholly-owned subsidiary of Shuanghui, already the parent of China's largest meat processor.
Smithfield originally announced the proposed sale in late May, and executives spent the summer promoting its virtues to U.S. legislators and regulators. It obtained the approval of the multi-agency Committee on Foreign Investment in the U.S. Sept. 6, clearing the way for this week's vote and closing.
"This is a great transaction for all Smithfield stakeholders, as well as for American farmers and U.S. agriculture," Smithfield CEO C. Larry Pope said following the shareholder vote. "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."
Despite a rough start to the fiscal year, Smithfield is viewed as quite a prize for Shuanghui, and for China in general as it works to feed an ever-increasing and increasingly-affluent populace. Smithfield reported Sept. 6 that its net income fell nearly 36% in its first quarter compared with the same period last year, to $39.5 million, despite a 10% increase in sales, to $3.4 billion.
Pope described the quarter as the likely "low point" for the year, and Smithfield's new owners seemed to agree, noting their excitement about closing the $7.2 billion transaction.
“This transaction will create a leading global animal protein enterprise,” said Zhijun Yang, CEO of Shuanghui. “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.”