July 16, 2008

Smithfield's sale of 5-percent stake to China's COFCO gets antitrust approval

COFCO Ltd., China's largest agricultural trading and processing company, received clearance from the Federal Trade Commission to acquire a 5-percent stake in Smithfield Foods Inc. (SFD).

Federal regulators granted early termination Monday of the waiting period required under the Hart-Scott-Rodino antitrust law, the FTC said.

On June 30, the US' largest pork processor disclosed it will sell seven million shares to COFCO.

News of the sales - proceeds of which will go toward debt repayment - sent the shares of the Smithfield, Va., company to a five-year low the next day, ending at US$17.45.

Based on the July 1 closing share price, the deal would amount to about US$122 million. The number is still in flux as it is contingent on the final closing price of Smithfield's June 30 offering of convertible senior notes due in 2013 worth US$350 million.

Smithfield shares recently traded Tuesday down 43 cents, or 2.2 percent, at US$18.89.