The sale of US pork producer, Smithfield Foods, to China’s largest pork processor, Shuanghui International grabbed the headlines last week, with management insisting the deal will help open the Chinese market to US hogs. CEO Larry Pope believes the transaction is “good news” for Smithfield and the US pork industry as a whole. Elsewhere, the Citi Global Consumer Conference got under way in New York where attendees heard presentations from multinationals such as General Mills and Mondelez International.
“At the end of the day, this is about growing the combined company into a leading global protein group” – Smithfield CEO Larry Pope claims its sale to Shuanghui International would help address the US trade deficit by boosting pork exports to the growing Chinese market.
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“In our view, it is unlikely that the Chinese authorities [will] hold up the purchase. However, US authorities may be more of a challenge” – BB&T Capital Markets analyst Heather Jones questions regulatory approval of Smithfield’s sale to Shuanghui International.
“For our US yoghurt business in total we did fall short of our goal of renewed sales growth this year” – General Mills CFO Don Mulligan says its US yoghurt division missed its target of seeing sales grow again despite a raft of new products.
“It is unclear what Delhaize will do with the cash as there are few bond maturities in the near future: we expect the company to run a somewhat inefficient balance sheet for the foreseeable future” – Citi research analyst Alastair Johnston emphasises the short-term impact on Delhaize’s balance sheet on the sale of its Sweetbay, Harveys and Reid’s chains could be muted.
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“We are taking a very disciplined approach to these investments. We are not starting from scratch, we already have strong scale” – Mondelez CEO Irene Rosenfeld said the firm is looking to increase spend and capitalise on the “white space” opportunities in China.
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