Arab Today, arab today smithfield agrees to takeover by china\s shuanghui
Last Updated : GMT 14:39:36
Arab Today, arab today
Arab Today, arab today

Smithfield agrees to takeover by China\'s Shuanghui

Arab Today, arab today

Arab Today, arab today Smithfield agrees to takeover by China\'s Shuanghui

Washington - AFP

Shuanghui International won the largest ever Chinese takeover of a US company Tuesday when shareholders of pork giant Smithfield Foods approved its $7.1 billion offer. The deal locks in for Shuanghui and the giant Chinese market a strong supply from the world\'s largest pig raiser and pork processor. Smithfield said the deal received 96 percent of the votes cast at a special shareholders meeting, despite an earlier challenge by a key investor arguing that it undervalued Smithfield. Smithfield president and chief executive Larry Pope called the deal \"a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture.\" Shuanghui, China\'s leading meat processor, will pay $4.5 billion in cash, $34 a share, for Smithfield, an iconic name in American kitchens with $13 billion in annual sales. Including Smithfield debt, the deal\'s value comes to $7.1 billion. The deal had to clear a number of hurdles, including questions from some politicians worried about Chinese control of a company deeply part of the US food system, and a review by the national security-focused Committee on Foreign Investment in the United States. CFIUS gave the deal a green light in early September, but then the companies also had to beat objections by hedge fund Starboard Value, a major shareholder, which said that Smithfield if broken up could be worth nearly $11 billion. Starboard had sought more time to assemble a group of alternative buyers, but was unable to do so before Tuesday\'s shareholder vote. Last Friday it admitted failure and announced that it would back the Shuanghui deal. 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. \"The partnership is all about growth, and about doing more business at home and abroad,\" said Pope in a statement. \"It will remain business as usual -- only better -- at Smithfield, and we look forward to embarking on this new chapter.\" The companies expect to close the deal on Thursday. Smithfield shares closed unchanged at $33.98 on the New York Stock Exchange.

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