Chinese famous meat producers Shuanghui announced the acquisition of the world’s largest hog and pork producer Smithfield Foods, the transaction amount was valued approximately $ 7.1 billion.
Shuanghui Group founder, Wan Long, explained on this transaction to the Tencent Finance that “this deal was handled by Shuanghui international, rather than Shuanghui Group or the Shuanghui Development. The transaction amount of $ 7.1 billion includes equity plus debt. The trading capital is from our own funds as well as international funds.”
It is understood that this transaction will be financed by Shuanghui International, Morgan Stanley Senior Funding and banks consortium. Barclays Capital served as financial advisor to Smithfield, and Morgan Stanley served as financial advisor for Shuanghui International.
Wan Long, said “Smithfield has good technical and brand image which is the most valueable to Shuanghui.” UBS Chinese M & A group leader Philip Partnow had told Tencent Finance that China now has a large number of middle-class, and more and more consumers have better wages; they are able to buy better quality products, but Chinese consumers do not trust Chinese enterprise and their product, in particular for the food industry. Thus for domestic companies, mergers and acquisitions with overseas companies can convince Chinese consumers to trust their products.
Source: Tencent Finance