Blog: Katy AskewIs Chinese meat company WH Group eyeing US M&A?

Katy Askew | 6 May 2016

Rumours Chinese pork giant WH Group is eyeing acquisitions, particularly in the US, have surfaced.

WH Group, which did not respond to requests for comment, became the world's largest pork processor when it acquired US firm Smithfield Group in 2013. Over the past two years, the Hong Kong-listed meat firm has focused on paying down debt taken on to fund the Smithfield deal and integrating the US business's sizeable global operations.

When WH Group delivered its results for 2015 at the end of March, it was clear headway has been made on these objectives. The company has strengthened its financial position and “gradually revealed” synergies helped it deliver an expectation-beating 17.5% rise in net profit.

The company did, however, reveal sales came under pressure in a period marked by "challenging industry and macroeconomic environments". An answer to such concerns is to turn to M&A. Through acquisitions, WH Group could look to consolidate its lead in the global pork sector. However, according to analysts at BB&T Capital Markets, WH Group will more likely look to diversify its revenue stream.

“The company has increasingly been talking about global acquisition opportunities, with an eye on North America in addition to other regions. The company is looking to broaden its scope beyond pork,” the analysts wrote in a recent investor note.

The question then becomes which companies WH Group could be targeting. Is WH Group looking for a transformational strategic opportunity or a smaller bolt-on deal?

Within the US, BB&T suggested WH Group's comments "have implications" for Tyson Foods, Pilgrim’s Pride, Sanderson Farms and Hormel Foods. If WH Group is looking at North America more broadly, it seems probable Canada's Maple Leaf Foods could be added to this list.


just-food hits the UK's airwaves

The BBC turned to just-food today for insight on the price dispute between Tesco and Unilever....


Japan's Kewpie expands in Poland with Mosso takeover

Japan's Kewpie Corp. is acquiring Polish food maker Mosso Kwasniewscy as part of its overseas expansion efforts....


Ranjit Boparan buys another UK business out of administration

Just weeks after buying UK turkey processor Bernard Matthews from administration, food tycoon Ranjit Boparan has struck a similar deal....


Tyson Foods investors left to chew over analyst claims

Shares in Tyson Foods slumped on Friday, closing down almost 9% after an analyst claimed a lawsuit facing the company could hit the US meat titan....

just-food homepage

Forgot your password?