Smithfield to Buy Controlling Interest in Campofrio
Mr Ballve is the current chairman of Campofrio. The acquisition would give Smithfield 87.6 percent controlling interest in CampofrÃo, Europe's packaged meats company. Smithfield currently owns 37 percent of Campofrio.
This followed the filing by Campofrio of a Communication of Relevant Fact with the Spanish securities regulators relating to the potential joint de-listing takeover bid.
The takeover bid would be subject to various conditions, including completion of confirmatory due diligence, entering into all necessary binding agreements, approval of the takeover bid by the Spanish securities commission, and the waiver of the company's existing standstill agreement with Campofrio, which is currently effective until December 30, 2011.
The transaction would also be subject to other regulatory approvals, including competition review.
While no financing arrangements have been finalized, the company anticipates the estimated E500m required to fund the takeover bid would be provided through a combination of existing liquidity and capital markets financings that will enhance shareholder value while maintaining a conservative balance sheet.
Smithfield Foods is a pork processor and hog producer, with revenues exceeding $11 billion in fiscal 2010. In the US, the company is engaged in numerous packaged meats categories.
Larry Pope, president and CEO of Smithfield Foods, said: â€œThe acquisition of Campofrio would further Smithfield's long term strategy of becoming a leading global consumer packaged meats company. In addition, we are assessing potential synergies relating to sales, operations and raw materials with both our US and international businesses.â€
Will the move benefit Smithfield?
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