Smithfield rises on possible JBS acquisition talks

Smithfield Foods Inc., the world's largest pork processor, rose the most in seven months after reports state that Brazil's JBS SA may hold talks to acquire the company.

Smithfield rose 80 cents, or 5.4%, to US$15.68 at 10:54 a.m. in NYSE composite trading. The shares earlier gained as much as 8.9%, the biggest intraday increase since November 11.

JBS, the world's biggest beef producer, bought Smithfield's Beef operations in 2008 for US$565 million and paid US$800 million for control of US chicken processor Pilgrim's Pride Corp. in 2009. Acquiring Smithfield would substantially expand Sao Paulo-based JBS's operations in Europe and the US, analysts said.

Analysts believe that the deal would align with JBS's strategy of global footprint expansion. Meanwhile, JBS fell 4.8% to BRL7.62 at 11:03 a.m. New York time in Sao Paulo trading.

Smithfield Foods, whose market value is estimated at US$2.47 billion, posted revenues of US$11.2 billion in 2009.

JBS's Brazilian rival Marfrig has recently acquired Keystone Foods, the US company that pioneered mass production of boneless chicken nuggets in the 1970s, for US$1.26 billion.