Smithfield Foods Shareholders Approve Shuanghui Buyout
25 Sep 2013 --- Smithfield Foods, Inc. has announced that the shareholders of the company voted overwhelmingly to approve the proposed strategic combination with Shuanghui International Holdings Limited. At a Special Meeting of Smithfield shareholders held yesterday, more than 96% of the votes cast were voted in favor of the $7.1 billion transaction, which represents approximately 76% of Smithfield's total outstanding shares of common stock as of the record date for the Special Meeting.
"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."
Under the terms of the agreement Smithfield shareholders will receive $34.00 per share in cash for each share of Smithfield common stock that they own. Upon closing of the transaction, Smithfield's common stock will cease to be publicly traded and the company will be a wholly-owned subsidiary of Shuanghui International Holdings Limited, operating as Smithfield Foods. Subject to customary closing conditions, the company expects to complete the combination by September 26, 2013.
Shuanghui International is a holding company based in Hong Kong, controlling the Shuanghui Group and Henan Shuanghui Development, which it calls China's largest meat processing operation.
It reported $6.2 billion in revenues last year, mainly from meat processing and distribution through 13 Chinese provinces.
The Smithfield deal will help Shuanghui satisfy China's hunger for pork, after the country's imports more than tripled between 2005 and 2010, to nearly two million tonnes a year.
But US sales to China have fallen over the past year as Beijing said American exporters had to prove their pork free of ractopamine, a synthetic swine feed supplement aimed at boosting the animal's weight.
China, Russia and the European Union have expressed worries that the supplement raises health risks for consumers.
In February Smithfield announced that it was eliminating ractopamine from its farms and plants expressly to comply with requirements in China. That opened the way for the Shuanghui deal. Shuanghui has said it would maintain the Smithfield name and its huge farm and processing facilities, as well as the corporate headquarters in Smithfield, Virginia.
