Shuanghui to Acquire Smithfield Foods (SFD) for $34/Share
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Smithfield Foods, Inc. (NYSE: SFD) and Shuanghui International Holdings Limited today announced that they have entered into a definitive merger agreement that values Smithfield at approximately US$7.1 billion, including the assumption of Smithfield's net debt. Shuanghui International is the majority shareholder of Henan Shuanghui Investment & Development Co. (SZSE:000895), which is China's largest meat processing enterprise and China's largest publicly traded meat products company as measured by market capitalization.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Shuanghui will acquire all of the outstanding shares of Smithfield for US$34.00 per share in cash. The purchase price represents a premium of approximately 31% over Smithfield's closing stock price on May 28, 2013, the last trading day prior to today's announcement.
The transaction will be financed through a combination of cash provided by Shuanghui, rollover of existing Smithfield debt, as well as debt financing that has been committed by Morgan Stanley Senior Funding, Inc. and a syndicate of banks. There is no financing condition to this transaction.
The closing of the transaction is subject to certain conditions, including, among others, approval by Smithfield's shareholders, the receipt of approval under applicable U.S. and specified foreign antitrust and anti-competition laws, The Committee on Foreign Investment in the United States and other customary closing conditions.
The transaction is expected to close in the second half of 2013.
Barclays is serving as financial advisor to Smithfield and Simpson Thacher & Bartlett LLP and McGuireWoods LLP are serving as legal counsel. Morgan Stanley is serving as financial advisor to Shuanghui and Paul Hastings LLP and Troutman Sanders LLP are serving as legal counsel.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Shuanghui will acquire all of the outstanding shares of Smithfield for US$34.00 per share in cash. The purchase price represents a premium of approximately 31% over Smithfield's closing stock price on May 28, 2013, the last trading day prior to today's announcement.
The transaction will be financed through a combination of cash provided by Shuanghui, rollover of existing Smithfield debt, as well as debt financing that has been committed by Morgan Stanley Senior Funding, Inc. and a syndicate of banks. There is no financing condition to this transaction.
The closing of the transaction is subject to certain conditions, including, among others, approval by Smithfield's shareholders, the receipt of approval under applicable U.S. and specified foreign antitrust and anti-competition laws, The Committee on Foreign Investment in the United States and other customary closing conditions.
The transaction is expected to close in the second half of 2013.
Barclays is serving as financial advisor to Smithfield and Simpson Thacher & Bartlett LLP and McGuireWoods LLP are serving as legal counsel. Morgan Stanley is serving as financial advisor to Shuanghui and Paul Hastings LLP and Troutman Sanders LLP are serving as legal counsel.
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