Source:  Lisa M. Keefe, MEATINGPLACE.COM, 4/6/11

Smithfield Foods Inc. said today that it and the chairman of Campofrio Food Group S.A. packaged meats company, Pedro Ballve, are evaluating a joint de-listing takeover bid to buy approximately 50 percent of the Madrid-based Campofrio for €9.5 ($13.62) per share.

Smithfield already owns 37 percent of Campofrio. The acquisition would give Smithfield 87.6 percent controlling interest.

The U.S. processor and Ballve made the announcement after Campofrio filed 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 approval of the takeover bid by the Spanish securities commission, and the waiver of the company's existing standstill agreement with Campofrio, which is effective until Dec. 30, 2011. The transaction would also be subject to other regulatory approvals, including competition review.

"The acquisition of Campofrio would further Smithfield's long term-strategy of becoming a leading global consumer packaged meats company," said C. Larry Pope, Smithfield’s president and CEO. "In addition, we are assessing potential synergies relating to sales, operations and raw materials with both our U.S. and international businesses."

While no financing arrangements have been finalized, the company anticipates the estimated €500 million ($716.2 million) required to fund the takeover bid would be provided through a combination of existing liquidity and capital markets financing.

In 2010, Campofrio reported revenues of €1.83 billion ($2.62 billion). Smithfield’s revenues in its fiscal 2010 were $11.2 billion.

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