June 6, 2013
Continental Grain to exit ownership stake in Smithfield
After Smithfield agreed to a US$4.7 billion acquisition by Shuanghui International Holdings Ltd., Continental Grain Co. said it will exit from its long-term ownership stake in Smithfield Foods Inc.
"We have been advocating for value creation and are pleased that the Smithfield board of directors and management are being proactive in realising value for the benefit of all of its shareholders," Continental Grain Chairman and Chief Executive Paul Fribourg said Monday.
Shuanghui agreed to pay US$34 a share for Smithfield, a 31% premium to the company's closing price, in a deal that would mark the biggest Chinese takeover of a US company. Including debt, the deal values Smithfield at US$7.1 billion.
Smithfield, whose brands also include John Morrell, Armour and Farmland, had seen its revenue decline in recent quarters amid lower meat and live-hog prices and weaker domestic retail demand.
In March, the company reported its fiscal third-quarter earnings rose 3.2% on 3% sales growth as improved sales of packaged meats helped to mitigate declining fresh pork sales. Shares of Smithfield were off by US$0.08 to US$32.90 after hours Monday (Jun 3). The stock is up 53% since the start of the year.
