China buys Smithfield's for $5 Billion!

China buys Smithfield's for $5 Billion!

Postby Oscar » Thu May 30, 2013 8:06 am

China's expensive love affair with pork

< http://money.cnn.com/2013/05/29/news/co ... index.html >

QUOTE: "Once the deal is approved and completed, Smithfield will cease to be a publicly traded company, becoming a wholly owned independent subsidiary of Shuanghui International.

Shuanghui said it will keep SmithField's current management team and all of the company's ongoing operations in place after the transaction."


By Parija Kavilanz @CNNMoney May 29, 2013: 2:31 PM ET

China loves its pork and is willing to pay big for it.

On Wednesday, Virginia-based Smithfield Foods (SFD, Fortune 500), the world's largest processor of pork, announced that it was being bought by Chinese meat producer Shuanghui International for nearly $5 billion. It is the biggest announced acquisition of a U.S. company by a Chinese buyer.

The deal makes sense: China's pork consumption has been steadily increasing.

China is already the world's largest producer and consumer of pork. In China, per-capita pork consumption last year was 86 pounds, up from 70 pounds in 2002, said Mark Schultz, chief analyst with Minneapolis-based Northstar Commodity Investment.

At the same time, Americans are eating less pork. Per-capita pork consumption in the U.S. was 58 pounds last year, down from 66 pounds in 2002.

Given these trends, the deal to acquire Smithfield seems to be a strategic long-term move by Shuanghui, said Schultz. If pork consumption in China continues to rise, Chinese pork producers would have to look for alternative sources, he said. Shuanghui's chairman said in a statement that the deal aims to expand Smithfield's products into the Chinese market.

Related story: Don't look now, but M&A is back
< http://money.cnn.com/2013/02/28/news/co ... tml?iid=EL >

"China already produces an adequate supply of 470 million hogs a year versus about 100 million hogs in the U.S.," said Schultz. "The question is how much more can you expand the production before you're limited by space and other issues."

One such issue is risk of disease if pig farms are placed closer together to increase quantity, he said. China's pork industry recently faced controversy when a farm admitted to dumping dead, possibly diseased, pigs into a river.
< http://www.cnn.com/2013/03/13/world/asi ... ver?iid=EL >

Shuanghui itself was in the spotlight in 2011 when an illegal additive was allegedly found in meats produced by a subsidiary of the company.

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< http://money.cnn.com/2013/05/29/news/co ... index.html >
Oscar
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Action Stop the Chinese Buyout of Smithfield!

Postby Oscar » Thu May 30, 2013 9:01 pm

Action Stop the Chinese Buyout of Smithfield!

< https://secure3.convio.net/fww/site/Adv ... 22.app340a >

Smithfield, the largest U.S. pork producer is being bought out by Shuanghui International, China's largest meat processing company. This could threaten U.S. national security and food security, raising prices for U.S. consumers, putting U.S. farmers at a disadvantage, and creating new food safety risks.

Ask your members of Congress to block this purchase, and investigate the risks of a foreign company buying out American food companies.

Please take action below and we'll deliver your signature and additional message directly to your members of Congress.

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Oscar
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