The completion of Smithfield’s acquisition of Premium Standard Farms, last Monday, has been greeted with optimism and energy.
“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.”
The 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 plans.
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 2008.
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 director.
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.