Buy Chinese company of Smithfield Foods for almost $5b

3:55 AM almost, Chinese, company, Foods, Smithfield No Comments

Agreed in a hog heaven marriage Smithfield Foods of Chinese meat producer Shuanghui group bought between $4.72 billion for be. The deal will take the world's largest pork manufacturers with brands such as armor, farmland and its namesake, private.

Hong Kong-based Shuanghui has a large number of global companies, which include food, logistics and flavouring products and is company China's largest meat processing.

Smithfield's shareholders will receive $34 per share under terms of the transaction announced Wednesday - a 31 percent premium to the company of Smithfield, VA., the stock price of $25,97 on Tuesday closed.

Boards of Directors of both companies have unanimously approved the transaction, which still needs approval from shareholders of Smithfields. The transaction may also be subject to review by the U.S. Committee on foreign investment.

The companies make the deal worth about $7.1 billion of debt including. Smithfield Foods has about 138.8 million outstanding shares according to FactSet. Smithfield shares are no longer publicly traded when the deal closes.

Its shares $7,23 or 27.8 per cent rose to $33.20 in premarket trading Wednesday.

Shuanghui has 13 facilities that produce more than 2.7 million tons of meat per year. Under the terms of the agreement, no closures of Smithfield are facilities and locations - including headquarters in Smithfield, VA., the company said.

Shuanghui be workers honor also the collective bargaining agreements in place with Smithfield and Smithfield of the existing management team will remain in place. The company employs about 46,000 people.

In a press release on Wednesday Smithfield CEO Larry Pope called movement a "great transaction for everyone involved in Smithfield, as well as for American farmers and U.S. agriculture."

In recent months, Smithfields has second-largest shareholder, Continental Grain Co., since then Smithfield to consider whether to split itself, saying it was time for the company "Ernst shareholder value building preserved." In the wake of a March letter from continental grain Smithfield said it would review the proposals "at the appropriate time." Representatives of continental grain has no immediate comment Wednesday News offer.

In its most recent quarter, its net income rose in March reported more than 3 percent gains in swine production, its international business and its packaged meats such as deli meats, bacon, sausage and hot dogs - a great growth market for the company.

Still, with consumers caught pork producers like Smithfield in a tug of war. The company must cost namely, to compensate for the grain, which used it to feed the increase of in prices, rising commodity prices. But consumers are still extremely sensitive to price changes in the current economy. By raising prices, chicken cut in the revenue should consumers cut or buy cheaper meats like Smithfield risks.