05-29-2013 06:38 AM
Submitted by Tyler Durden on 05/29/2013 07:21 -0400
Moments ago, news broke that in a stunning M&A move, an American pork icon - Smithfield Foods, may be acquired as soon as today by China's Shuanghui, also known as Shineway, which is China's largest pork producer. The Chinese are coming, and they want America's pork. It unclear how soon after the deal gets clearance by the Committee on Foreign Investment (if it does at all) will the US be subject to that well-honored China excess pig "clearance" strategy: floating 'em down the river.
Chinese meat producer Shuanghui Group is close to a deal to acquire Smithfield Foods Inc. for between $4.5 billion and $5 billion, according to people familiar with the matter.
The sale of the Smithfield, Va.-based pork and meat producer could be announced as soon as Wednesday morning, and comes on the heels of agitation from a large shareholder to split up the company.
The bid by Shuanghui, also known as Shineway, represents a roughly 30% premium over Tuesday's close of $25.97, the people said. But a deal could be subject to review by the Committee on Foreign Investment in the United States, they said.
Smithfield's board of directors is concerned about the deal passing muster with CFIUS review, said a person familiar with the matter. The deal is structured with a reverse breakup fee in the event that the deal falls apart due to regulatory issues, the person said.
Founded in 1936, Smithfield has a market capitalization of $3.6 billion as of Tuesday's close.
Shuanghui Group, based in Henan province in central China, is the holding company for Henan Shuanghui Investment & Development Co., 000895.SZ +1.47% which is publicly listed in the Chinese city of Shenzhen. Shuanghui is China's largest pork producer, according to the company, and it sells products under the English name Shineway.
A spokeswoman for Smithfield couldn't immediately be reached.
Confused why China wants pork? Simple: the meat is the primary food in the country, the biggest source of marginal food inflation, and is produced more in China than in the entire rest of the world.
Whats up with that? Hope all you guys with Murphy Brown Barns can speak chinese.
This is what happens when corn gets to high priced it is now cheaper to turn us into the hog lot instead of transporting the corn to china.
We have been owned.
Wonder when we have pigs floating down the miss. river if every body will stillthink E was the way to go.
05-29-2013 07:25 AM
Since 1998 the hog industry has been one of the most closed businesses in the world let alone agriculture. These mergers happen all the time. The last big merger in ag was JBS acquiring Swift. I am lost as to why you blame ethanol for the dairy industry's problems. We just came out of one of Americas worst droughts in history with little hay or corn and you blame ethanol? Without ethanol we may only have had 85 million corn acres in the US in 2012 compared to 97 million. If things get too bad for you guys then we might have another herd buyout, so you guys get paid good money to ship cull cows to slaughter, keep the good ones and then repeat this cycle over again in a couple years. You still have not explained MILC payments while you rant over federally subsidized crop insurance. I know the price of Americas "interest" oil is one of this country's worst overseas investments. I respect you Jr but I think you need to look at the big picture here.
05-29-2013 09:35 AM
Plow horses would still be king if corn price hadn't gone up.
Irrational-------- is thinking all would be better if we were all suffering. But my old throwing arm is sour ----- I have to throw rocks at the close targets.
05-29-2013 09:57 AM
You can hit the trigger.
rational response------------- as a former hog producer---------------- Hogs have been in a suit and tie since the early 90's when diversified farms were pushed over the cliff at 8 cents per pound. Who owns them has been "absentee" for a long time.
The only one who should be concerned is the consumer---------- because our markets are not going to be Smithfield priority in the future.
Will be interesting to see how the Chinese approach county zoning. Is western Kansas for sale? ------------ "The Peoples Republic of Wind"
05-29-2013 10:36 AM
They have been buying pork through Smithfeild for several years. A lot of it coming out of Morrels in Sioux Falls, S.D. I'll bet when that package of pork hits the market in China it will say produced in USA? For a premium price, food safety is becoming a big issue in China.
05-29-2013 04:59 PM
Will the pork market refuse to be published due to confidentiality law as we hear repeated daily or maybe we can tune into Cina business and get the daily report --- sw - will Seaboard be next and will Kaye have to a currency exchange ?
05-29-2013 06:10 PM
Could this also be another step for China to garner US property? They already have control of our national debt, and therefore internatinal policy. They will now have control over a greater part of our food supply. How much more will they need to own to start controlling us? Just because it's a Chinese creep doesn't mean it won't become a tidal wave.
05-29-2013 07:41 PM
WT They hold "some of our debt " although they are securing financing through a US company to swing the deal - point being when you have one instatution controlling a given market look what happens which wouldn't take place when pork was in smaller hands---