China's Shuanghui International Holdings Limited announced Wednesday that ithas entered into a definitive merger agreement with the world's largest pork processor,Smithfield Foods, to create a leading global pork enterprise.
The acquisition valued Smithfield at approximately $7.1 billion, including the assumption ofSmithfield's net debt.
Under the terms of the agreement, Shuanghui will acquire all of the outstanding shares ofSmithfield for 34 dollars per share in cash. The purchase price represents a premium ofapproximately 31 percent over Smithfield's closing stock price on Tuesday.
"Together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the UnitedStates and around the world," said Shuanghui Chairman Wan Long.
The transaction is expected to close in the second half of 2013. The closing of the transactionis subject to the approval by Smithfield's shareholders and related legal procedures, amongothers.
"This transaction provides Smithfield shareholders with significant and immediate cash value fortheir investment, and ensures that Smithfield will continue to execute on its strategic prioritieswhile maintaining our brand excellence, community involvement, and our commitment toenvironmental stewardship and animal welfare," said C. Larry Pope, president and CEO ofSmithfield.
Smithfield Foods is a 13-billion dollar global food company and the world's largest porkprocessor and hog producer. Shuanghui International and its subsidiaries are the majorityshareholders of Henan Shuanghui Investment and Development Co., which is China's largestmeat processing enterprise and is publicly traded on the Shenzhen Stock Exchange.
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