Smithfield Foods considers bid for controlling interest in Spanish food company
- April 6, 2011
Smithfield Foods Inc. is considering making a bid for a controlling interest in Madrid-based Campofrio Food Group, a major European packaged meats company.
The Smithfield-based company and Pedro Ballve, the chairman of Campofrio, are discussing a joint delisting takeover bid to acquire about 50 percent of Campofrio stock for €9.5 (euros) per share, the equivalent of $13.46 per share. The acquisition would give Smithfield Foods an 87.6 percent controlling interest in Campofrio. Smithfield Foods currently owns 37 percent of Campofrio.
In 2010, Campofrio reported revenues of €1.83 billion ($2.6 billion).
“The acquisition of Campofrio would further Smithfield’s long-term strategy of becoming a leading global consumer packaged meats company,” C. Larry Pope, Smithfield Foods’ president and chief executive officer, said in a statement.
Smithfield Foods said no financing arrangements have been finalized, but the company expects the €500 million, or $708 million, needed to finance the deal would be provided through a combination of existing liquidity and capital markets financings.
The takeover bid would be subject to a number of conditions, including approval of the bid by the Spanish securities commission and the waiver of a standstill agreement with Campofrio, which is currently effective until Dec. 30. The transaction would also be subject to other regulatory approvals, including competition review.