Smithfield shareholders approve Shuanghui merger

Published on: Sep 24, 2013

Smithfield FoodsAT a special meeting, shareholders of Smithfield Foods voted overwhelmingly to approve the proposed strategic combination with Hong Kong’s Shuanghui International. The deal is valued at more than $7 billion, including the $34 per share sale price and assumption of $2.5 billion in Smithfield debt.

Votes in favor of the deal represented approximately 76% of Smithfield's total outstanding shares of common stock. Smithfield is the world’s largest pork producer and processor, and Shuanghui owns China’s largest meat processor.

"We are pleased with the outcome of today's vote and thank all of our shareholders for their support," said C. Larry Pope, president and chief executive officer of Smithfield. "This is a great transaction for all Smithfield stakeholders, as well as for American farmers and U.S. agriculture. The partnership is all about growth, and about doing more business at home and abroad. It will remain business as usual — only better — at Smithfield, and we look forward to embarking on this new chapter."

Upon closing of the transaction, which the the company expects to complete by Sept. 26, Smithfield's common stock will cease to be publicly traded and the company will be a wholly-owned subsidiary of Shuanghui International Holdings Limited, operating as Smithfield Foods. Shuanghui has committed to maintaining Smithfield’s current brands and operations upon closing.

The companies announced Sept. 6 that the Committee on Foreign Investment in the United States (CFIUS) had cleared the sale; several Congressional committees held hearings on the ramifications of the deal, with some legislators and policy experts raising concerns about Chinese ownership of a major U.S. food company.

Former Smithfield shareholder Continental Grain sold its shares in the company – totaling 6% of the company’s ownership – shortly after the May 27 announcement of the Shuanghui deal, arguing that the company would be worth more if it were divested as three separate companies. Investor Starboard Value, which owned 5.7% of the firm, argued against the deal on similar grounds.

The vast majority of shareholders, however, did not share their concerns: 96% of votes cast at the special meeting favored the deal.

“This transaction will create a leading global animal protein enterprise,” said Zhijun Yang, CEO of Shuanghui. “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.”