Smithfield Overwhelmingly Approves Shuanghui Deal

Shareholders at US pork producer Smithfield Foods Inc. overwhelmingly approved a $4.7 billion takeover bid by Shuanghui International Holdings on September 24. The deal, approved by more than 96 percent of voting shareholders, is the largest-ever Chinese takeover of an American company.

The takeover cleared its final hurdle on September 20, when minority owner Starboard Value LP, dropped its opposition to the deal. Executives at the activist hedge fund had said they were seeking alternate bidders who would pay “substantially” more than the $34 per share stipulated in the current agreement.

Even with Starboard opposition, the deal had been expected to close since early September, when the Committee on Foreign Investment in the United States (CFIUS) favorably concluded its 75-day national security review of the transaction. Despite opposition by US politicians, CFIUS found that the deal would pose no threat to the food supply or national security of the US.

According to a company press release, Smithfield and Shuanghui will complete the deal on September 26. Smithfield will retain its name, but it will become a private company. Shuanghui and Smithfield spokespersons have said repeatedly that the deal is a “win-win” for the US and China, where the appetite for meat—and pork in particular—is ballooning.

The $13 billion Virginia-based Smithfield is the world’s largest pork processor and hog producer. Hong Kong-based Shuanghui International, which has more than $6.2 billion in annual sales, owns a majority stake in China’s largest meat processor, Henan Shuanghui Investment and Development Co. Ltd.

(USDA photo by Stephen Ausmus via Flickr)