Smithfield Foods confirms discussions to acquire controlling interest in Campofrio Food Group
This announcement is being made following the filing earlier today 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 (1) completion of confirmatory due diligence, (2) entering into all necessary binding agreements, (3) approval of the takeover bid by the Spanish securities commission, and (4) 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.
"The acquisition of Campofrio would further Smithfield's long term strategy of becoming a leading global consumer packaged meats company," said C. Larry Pope, president and chief executive officer. "In addition, we are assessing potential synergies relating to sales, operations and raw materials with both our U.S. and international businesses," he continued.
While no financing arrangements have been finalized, the company anticipates the estimated €500 million 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.
In 2010, Campofrio reported revenues of €1.83 billion.
Source: Smithfield Foods Inc.