Chinese meat processor buying Smithfield Foods for about $4.72B

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Associated Press & 13News

Posted on May 29, 2013 at 8:03 AM

Updated Wednesday, May 29 at 9:47 PM

NEW YORK (AP) -- Chinese meat processor Shuanghui International Holdings Ltd. has agreed to take Smithfield Foods private for approximately $4.72 billion.

"We do not anticipate any changes in how we do business operationally in the United States and throughout the world. We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui," said C. Larry Pope, president and chief executive officer of Smithfield in a news release.

Outside the plant in Smithfield Wednesday, some workers say they don't trust the deal, despite being told they can keep their jobs. Others are optimistic, thinking the Chinese deal could bring them even more work.

Shareholders of Smithfield, the world's biggest pork producer, will receive $34 per share. This is a 31 percent premium to the Smithfield company's closing stock price of $25.97 on Tuesday.

The companies put the deal's total value at about $7.1 billion, including debt.

Smithfield Foods Inc. -- whose brands include Armour, Farmland and its namesake -- has about 138.8 million outstanding shares, according to FactSet.

Both companies' boards have unanimously approved the transaction, which still needs approval from Smithfield's shareholders. The deal is expected to close in the second half of the year.

Shuanghui chairman Wan Long added, "... together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the United States and around the world. The combination creates a company with an unmatched set of assets, products and geographic reach."

Smithfield's stock surged $7.23, or 27.8 percent, to $33.20 before the market open.

Click here to read the press release from Smithfield Foods.

AP-WF-05-29-13 1158GMT

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