Under the deal, which was unanimously agreed by the boards of directors of both companies, Shuanghui International Holdings Ltd will acquire the outstanding shares in Smithfield, making it a wholly-owned independent subsidiary of the Chinese company.
In a statement, Smithfield said that its existing management team - including current president and chief executive officer C. Larry Pope - will remain in place and there will be no closures of its facilities or changes to staff employment conditions.
“It will be business as usual — only better — at Smithfield. We do not anticipate any changes in how we do business operationally in the United States and throughout the world. We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui,” said Pope.
Shuanghui chairman Wan Long said the merger would help China meet the growing demand for pork and give Smithfield access to the Chinese market.
“The acquisition provides Smithfield the opportunity to expand its offering of products to China through Shuanghui’s distribution network. Shuanghui will gain access to high-quality, competitively-priced and safe US products, as well as Smithfield’s best practices and operational expertise,” he said.
The merger is expected to be completed in the second half of 2013.