UPDATE 2-Smithfield shareholders OK sale to China's Shuanghui

Tue Sep 24, 2013 1:12pm EDT

Sept 24 (Reuters) - Smithfield Foods Inc shareholders on Tuesday approved the pork giant's $4.7 billion sale to Shuanghui International Holdings Ltd in what is shaping up as the biggest acquisition of a U.S. company by a Chinese firm.

The closely watched transaction, valued at $7.1 billion including debt, is expected to close by Sept. 26.

The deal, which aims to satisfy China's increasing appetite for pork, marries two of the world's largest pork producers and had faced scrutiny over China's high-profile food safety failures, concerns over U.S. pork supplies and U.S. national security.

But earlier this month, the U.S. Committee on Foreign Investment cleared the way for the deal, removing an important hurdle.

More than 96 percent of the votes cast at a special Smithfield shareholder meeting on Tuesday were in favor of the acquisition. The votes cast represented 76 percent of Smithfield's outstanding common shares, the company said in a statement.

Under the terms of the deal, Smithfield shareholders will receive $34 cash for each share of Smithfield common stock they own.

Shares in Smithfield were unchanged at $33.98 in midday trading.

After the acquisition closes, Shuanghui must then decide the fate of Spanish packaged meats company Campofrio, of which Smithfield holds a 37 percent stake.

Shuanghui can decide to buy the remaining stake in Campofrio which it does not own, or will have to reduce its position to less than 30 percent.

Smithfield had previously held talks to acquire a controlling interest in Campofrio in 2011 but scrapped plans, citing a weak European economy.

"We will comply with the applicable Spanish decrees on this matter," said a spokesperson for Shuanghui International. "After closing our merger, we will notify the Spanish stock exchange commission of our intended actions in this regard."

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Comments (1)
Zephon wrote:
A great example of a win win for Americans and the Chinese.

Americans will get jobs and increased demand for our pork products to the growing Chinese middle class.

China will get the food they need while moving more people out of poverty and help keep their inflation of food prices in check.

The laws of comparative advantage and a demonstration of the strength of capitalism in global markets.

Sep 24, 2013 5:23pm EDT  --  Report as abuse
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