Blog: Dean BestSmithfield and Chinese suitor get boost from Washington

Dean Best | 9 September 2013

Smithfield Foods, the world's largest pork processor, and Shuanghui International, the Chinese company lined up to buy the business, received a boost last week when a key government committee cleared the way for the takeover.

The Committee on Foreign Investment in the United States (CFIUS), which scrutinises whether foreign takeovers of US assets have national security implications, has given the green light to Shuanghui's US$7.1bn takeover of Smithfield, which was announced in May.

Some in Congress had expressed unease about a Chinese firm gaining control of a piece of the US food supply but experts in Washington expected the committee to back the deal, which, if approved by Smithfield shareholders, will be the largest takeover of a US business by a Chinese company.

All eyes now turn to Smithfield's shareholders. Investors are set to vote on the takeover on 24 September. However, last week, a large shareholder, activist fund Starboard Value, claimed rival interest in the US pork group could lead to a better offer for the business. Starboard has argued Shuanghui's bid under-values the US company and has insisted the pork processor would be worth more if it was split up and assets sold separately.

Under the terms of its deal with Shuanghui, Smithfield can postpone the 24 September meeting if it does not get enough votes to back the transaction. Starboard said last week it would vote against and urged fellow investors to do the same - to allow Smithfield more time to solicit more bids.

Starboard said Smithfield's deal with Shuanghui means the deal must close by 29 November or it is ripped up. The fund said if an alternative bid does fail to come to the table it will back the Shuanghui bid - but it is looking for rival bidders to emerge.

BLOG

We wish you a merry Christmas

Today (23 December) is just-food's last day before closing for Christmas. We'll return, raring to go on Tuesday 3 January - but of course there's been plenty of top-notch content that has gone live in...

BLOG

UK food associations come together on Brexit

The plethora of food manufacturing associations in the UK has been argued by some to be an impediment to the industry coming to a coherent position on the aftermath of Brexit and on what the sector sh...

BLOG

Amazon cools talk of plans for wave of grocery stores

An update on Amazon's plans for the grocery sector. The usually reticent retailer has this week poured cold water on claims it has plans for 2,000 physical grocery stores....

just-food homepage



Forgot your password?