Go-ahead for Smithfield-Shuanghui Merger07 September 2013
US - Shuanghui International Holdings and Smithfield Foods have been given the go ahed for their proposed merger from the US and Ukraine authorities.
The two companies received clearance on the deal from the Committee on Foreign Investment in the United States (CFIUS) on 6 September.
Smithfield and Shuanghui International also announced that the parties have received governmental merger clearance in Ukraine.
The deal remains subject to Smithfield shareholder approval and other customary closing conditions. Smithfield's shareholders are scheduled to vote on the transaction at a special shareholders meeting on 24 September 2013. Shuanghui International and Smithfield expect the transaction to close shortly thereafter.
"This transaction will create a leading global animal protein enterprise," said Zhijun Yang, Chief Executive Officer of Shuanghui International. "Shuanghui International and Smithfield have a long and consistent track record of providing customers around the world with high-quality food, and we look forward to moving ahead together as one company."
Smithfield Chief Executive Officer and President, C. Larry Pope, added: "We are pleased that this transaction has been cleared by CFIUS, and we thank the Committee for its careful attention to this review."
The move has been attacked by the US National Farmers' Union.
President Roger Johnson said: "Today’s ruling by CFIUS on the proposed acquisition of Smithfield Foods by Shuanghui Intl. is a disappointment for family farmers and ranchers across the United States. The deal represents the sale of one quarter of U.S. hog processing to a quasi-state-owned Chinese enterprise and is a dangerous precedent, in terms of food security and market competition.
"We continue to urge Congress, the administration, and other decision-makers to oppose this sale. Our domestic livestock markets are already largely non-competitive and foreign-backed control will only make the situation worse."
As previously announced on 29 May 2013, Shuanghui International and Smithfield have entered into a definitive merger agreement. Under the terms of the agreement, Smithfield shareholders will receive $34.00 per share in cash for each share of Smithfield common stock that they own. Upon consummation of the transaction, Smithfield will continue to operate under its existing brand names as a wholly owned subsidiary of Shuanghui International.
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