Shuanghui to Buy Back Smithfield Investment Notes30 September 2013
US - Following the completion of the takeover of Smithfield Foods by the Chinese processor Shuanghui last week, the company has told investors in senior notes in Smithfield that they can call on the new company to buy them back.
Smithfield said that holders of its 7.750 per cent senior notes due 2017 can call on the company to buy them back at 101 per cent.
The completion of the takeover now means that the combined company will have greater access to a large and growing Chinese market while at the same time retaining its food safety and quality control standards.
Shuanghui International Chairman Wan Long said: "Today marks an exciting new chapter for both of our proud organizations as we formally begin a partnership that will benefit our customers, employees, producers and partners.
"Together we look forward to utilizing our individual strengths, including Shuanghui's extensive distribution network in China and Smithfield's leading production and safety protocols, to provide safe, high-quality products to consumers worldwide."
Smithfield Chief Executive Officer and President C. Larry Pope added: "Our partnership ensures the stability of our business for all our stakeholders, particularly our employees and the communities we serve, while simultaneously unlocking exciting opportunities for growth in the large and rapidly growing Chinese pork market.
“This is a new era for Smithfield, but one that will continue to be defined by the strictest adherence to the highest standards of food safety and quality, an unwavering commitment to giving back to our communities and acting as a responsible global corporate citizen."
However, the future of some of Smithfield’s foreign subsidiaries was also thrown into doubt as the deal went through.
In Spain, Smithfield held a 37 per cent stake in the processor Campofrio, which also has processing interests in France, Italy, Switzerland, Germany, Portugal and the Netherlands.
This stake was transferred to Shaunghui in the takeover and the Chinese company could be forced by Spanish law to make a bid for the whole company unless it reduces its stake.
In the takeover deal, each Smithfield shareholder will receive $34 per share in cash for each share of Smithfield common stock that they own.
Smithfield will be a wholly-owned subsidiary of Shuanghui International Holdings Limited, operating as Smithfield Foods and under its existing brand names. Shares of Smithfield's common stock are no longer listed on the New York Stock Exchange.
TheMeatSite News Desk