Optimism after finalising Smithfield deal
The completion of Smithfield's acquisition of Premium
Standard Farms, last Monday, has been greeted with optimism and
"This combination is a great strategic fit for Smithfield," company president
and CEO C. Larry Pope reacted to the news. "The acquisition of PSF fits well
with our strong expertise in hog production and pork processing."
company said it will immediately start an assessment to determine synergies and
commercial opportunities of the merger. Restrictions during the regulatory
review had prevented this.
Green light for the
takeover, involving $674 million, was given last Monday. Both companies
announced their intentions last September, but it took Department of Justice
officials until this week to investigate the proposed merger
Last week, after an extended review of the transaction, the
Justice Department concluded that the transaction 'is not likely to harm
competition, consumers or farmers.'
Some analysts believe that high
maize prices could result in the deal hurting Smithfield's earnings in fiscal
Smithfield announced that Paul Fribourg,
chairman, president and CEO of ContiGroup, has been elected to Smithfield's
board, and that Michael Zimmerman, executive vice president, investments and
strategy and CFO of ContiGroup, has been appointed an advisory
With sales of $11 billion, Smithfield is the leading
processor and marketer of fresh pork and processed meats in the United States,
and the largest producer of hogs.
For more news on the Smithfield-PSF deal, click
â€¢ Smithfield Foods
â€¢ Premium Standard Farms
â€¢ US Department of Justice
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