LONDON, Nov 5 (IFR) - China's Shuanghui International
Holdings is to follow up its record-breaking acquisition of US
pork producer Smithfield Foods with a US$5bn flotation of the
combined company in Hong Kong next year.
According to two sources with direct knowledge of the
matter, Shuanghui has recently mandated six banks as sponsors
for the IPO. BOC International, Citic Securities International,
Goldman Sachs and Morgan Stanley are among those banks, said
The deal size could be as big as US$6bn, depending on market
conditions, according to one of the sources.
Shuanghui completed the US$4.7bn acquisition of Smithfield
in late September. The transaction, valued at US$7.1bn including
debt, is the biggest acquisition of a US company by a Chinese
Bank of China and Morgan Stanley have together provided
US$7bn of loans to finance the acquisition. Goldman Sachs,
meanwhile, is a private equity investor in Shuanghui.
The deal is expected to bring a much-needed boost to the
Hong Kong IPO market, which has recently lost the long-awaited
IPO of Alibaba Group to the US.
The other jumbo Hong Kong IPO scheduled is the US$4bn-$5bn
proposed spin-off of Hong Kong Electric from Hong Kong-listed
Power Assets. The deal is expected to hit the market in January
Should the Shuanghui IPO surpass the US$5bn mark, the deal
will become the biggest IPO in Hong Kong since October 2010,
when AIA Group raised US$20.4bn.