Shuanghui buy Smithfield for $ 4.72 billion

SAO PAULO-the Shuanghui International announced this morning the acquisition of Smithfield, American pig processing giant, for $ 4.72 billion.The deal aims to raise the supply of animal protein to the Asian country, the world's largest consumer of meat. The Chinese company is majority stockholder of Henan Shuanghui Investment & Development Co., largest meat processing company in China with. Shares of Smithfield recorded 25% recovery after the announcement.
Under the terms of the agreement, unanimously approved by both companies, the Shuanghui International will acquire 100% of the shares of Smithfield, the $ 34 per share, which will be a subsidiary of the Chinese company. The price represents a premium of approximately 31% of the market closure yesterday, the last day of negotiations in trading before the announcement of the merger.
According to the companies, the merger will create a global company with assets, products and geographic reach unparalleled in this market.
"We are pleased to have reached this agreement with Smithfield, which represents a historic opportunity for both companies," said Wan Long, chairman of Shuanghui. "The Shuanghui is the main producer of pigs in China and a pioneer in the meat processing industry. Together we can meet the growing demand for pigs in China importing high-quality products of the United States, without forgetting the American market and the rest of the world ".
"This is a great transaction for the stakeholders of Smithfield, as well as to American producers and American agriculture," said c. Larry Pope, President and Chief Executive Officer of Smithfield, which will keep the two positions. "We take the Smithfield to the level of global leadership in the processing of pigs and we are happy with the fact the Shuanghui recognize our quality and food safety practices and our 46 thousand dedicated employees. Will be ' business as usual ', but better yet, in Smithfield. Does not anticipate any changes in how we do business, "he added.
The Shuanghui stated that will honor the collective bargaining agreements that benefit the American company employees, as well as the current wages and benefits package to employees who are not represented. The agreement does not provide for the closing, either, of Smithfield plants or the shutdown of the company's current team.
The transaction will be financed through a combination of contributions from the debt bearing Shuanghui existing Smithfield as well as debt financing from Morgan Stanley Senior Funding, and the syndicate of banks.