April 7, 2011
Smithfield attempts to acquire Campofrio's share
Smithfield Foods Inc., together with Pedro Ballve, is in a discussion to analyse a joint de-listing takeover bid to attain the remaining approximate 50% of Campofrio Food Group S.A. for EUR9.50/share (US$13.60).
Ballve is the chairman of Campofrio. If a deal is reached, the acquisition would give Smithfield 87.6% controlling interest in CampofrÃo, Europe's leading packaged meats company. Smithfield currently owns 37% of Campofrio, which reported revenues of EUR1.83 billion (US$2.62 billion) in 2010.
This announcement was made after a filing was made April 6 by Campofrio of a Communication of Relevant Fact with the Spanish securities regulators relating to the potential joint de-listing takeover bid. The bid is subject to various conditions, including completion of confirmatory due diligence, entering into all necessary binding agreements, approval of the takeover bid by the Spanish securities commission, and the waiver of the company's existing standstill agreement with Campofrio, which is currently effective until Dec. 30. The transaction would also be subject to other regulatory approvals, including competition review.
"The acquisition of Campofrio would further Smithfield's long-term strategy of becoming a leading global consumer packaged meats company," said C. Larry Pope, Smithfield president and CEO. "In addition, we are assessing potential synergies relating to sales, operations and raw materials with both our US and international businesses."
No financing arrangements have been finalised, but the company anticipates the estimated EUR500 million (US$716.5 million) required to fund the takeover bid would be provided through a combination of existing liquidity and capital markets financings that will enhance shareholder value while maintaining a conservative balance sheet.