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Groupe Smithfield & Campofrio discuss merger

Smithfield Foods has confirmed that Groupe Smithfield, its 50/50 joint venture with investment funds controlled by Oaktree Capital Management LLC, is engaged in merger discussions with Campofrio Alimentacion, S.A., the largest processed meats company in Spain.

If the merger takes place as currently under consideration, Campofrio, a publicly-traded company on the Spanish Stock Exchanges, would issue shares to Smithfield and Oaktree in exchange for all of the membership interests in Groupe Smithfield.

Yield synergies
Smithfield, which currently owns 24 percent of Campofrio, would own 36 percent of the combined company after the merger. When merged the companies would yield synergies in production, distribution, marketing and sourcing, helping both firms manage rising fuel and feed costs.

Smithfield said that Groupe Smithfield and Campofrio have entered into a non-binding memorandum of understanding which has established the preliminary terms and conditions for a potential merger.

Regulatory approval
The transaction is subject to the negotiation of a definitive merger agreement, as well as shareholder and regulatory approval, including the grant of a takeover bid exemption by the Spanish securities regulator (CNMV).

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• Smithfield Foods

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