Smithfield Foods Inc., the largest pork processor in the United States,
will sell a 5-percent stake to China's COFCO Limited, The Wall Street Journal
reported yesterday.
Based on Tuesday's closing share price, the deal would amount to about US$122
million, said the report.
Last month, Smithfield reported a 94-percent drop in fiscal fourth-quarter
earnings and warned consumers that higher meat costs were on the horizon.
Smithfield has been courting the Chinese government for some time, and
recently sent a high-level executive delegation to China for a
several-months-long tour of hog facilities. China consumes about half of the
world's pork, according to the report.
The deal is the latest example of non-US companies buying up struggling US
meat producers.
Last year Brazilian beef company JBS SA bought one of the largest US beef
companies, Swift & Co.
In March, JBS entered into purchase agreements for two more companies,
including Smithfield's beef business.
This week, Smithfield said its European joint venture agreed to merge with
Spain's Campofrio Alimentacion SA in an all-stock deal.
Founded in 1952, COFCO Limited is a leading grain, oils and foodstuffs import
and export group in China and one of the country's largest food manufacturers.
