December 2, 2013

Shuanghui may bid for Spain's Campofrio

China's Shuanghui International Holdings plans to make a counter-bid for Spanish meat processor Campofrio, according to Spanish newspaper El Mundo, citing sources familiar with the matter.

Campofrio, whose products include hot dogs and canned ham, is the target of a €6.8 (US$9.25) per-share takeover offer from Mexican frozen food company Sigma AlimentosSGMAM.UL, valuing the company at €695 million (US$943 million).

Shuanghui inherited a 37% stake in Campofrio in September when it completed the acquisition of Smithfield Foods for US$4.7 billion, according to a press release posted by Campofrio. It said in September it planned to reduce the holding to less than 30% by December, below the threshold which would require it to make a full takeover bid under Spanish market rules, and giving it time to consider its options. The Chinese meat producer announced its intention to sell its shares in Campofrio, which some analysts said is an attempt to gain more time to assess the consequence of a Campofrio restructuring.

However, after signing an US$8 billion credit line with the Bank of China to finance its international expansion, Spanish daily El Mundo said Shuanghui now plans to fight for control of Campofrio.

Campofrío Food Group (CFG), Europe´s processed meats sector leader, recorded a net profit of €1.8 million (US$2.45 million) in the first nine months of this year, a reduction of €2.9 million from the same period of 2012. It also registered net sales of €1,390.9 million (US$1.9 billion) in January-September of 2013, holding sales flat on-year. Shares in Campofrio closed on Wednesday (Nov 27) up 0.14% at €7.20 (US$9.80).

Shuanghui International is a Hong Kong-based privately held company that owns a variety of food and logistics enterprises, including Smithfield Foods, Inc. and Henan Shuanghui Investment & Development Co. Ltd.