| |
Source: Lisa M. Keefe, MEATINGPLACE.COM, 6/25/08
In what is viewed as a response to a difficult cost environment, Smithfield Foods Inc. has a non-binding memorandum of understanding to merge its primary European subsidiary with Spain's largest meat processor, Campofrio Alimentacion, Smithfield said in a news release Wednesday. The all-share deal would create a company with about 2 billion euros ($3.12 billion) in annual revenues.
A merger is not yet a done deal. If the deal goes through, however, the combined companies would yield synergies in production, distribution, marketing and sourcing, helping both firms manage rising fuel and feed costs.
The Smithfield subsidiary, Paris-based Groupe Smithfield, is jointly controlled by the U.S. company and by Oaktree Capital Partners. It has plants in Portugal, the Netherlands, Belgium and France. Campofrio already is 24 percent owned by Smithfield. Its processing plants are in Portugal, Russia and Romania, turning out such processed pork items as ham, sausages and bacon.
Campofrio would issue stock to complete the deal, and its shareholders would control 51.5 percent of the merged company, Campofrio executives told Reuters. Smithfield would own 36 percent of the combined entity.
For more stories, go to www.meatingplace.com.
|
