Smithfield Foods drops company take-over bid
US pork producer Smithfield Foods Inc has dropped its bid to acquire a majority stake in European meat company Campofrio Food Group, blaming both the European economic climate and difficulties in refinancing.
The American company already owns a 37% share of Spanish-based meat processor Campofrio, and had hoped to increase its stake to over 87%, which would have given it a controlling interest.
C Larry Pope, Smithfield's president and chief executive officer, said: “While the acquisition of Campofrio would have furthered Smithfield’s long-term strategy of becoming a leading global consumer packaged meats company, we feel it is in the best interests of our shareholders to terminate negotiations at this time. Our decision has been influenced by numerous factors, including continued adverse economic conditions in Europe that show few signs of abating, and the recent decline in our stock price, which has made the proposed transaction more difficult to finance on a basis that is accretive to our shareholders.”
“We will continue to look for ways to capture and enhance synergies between Campofrio and Smithfield for the companies’ mutual benefit, despite the inability to merge the companies at the present time.”
Smithfield repositioned its retail focus two years ago, moving away from hog and fresh pork products towards processed and packaged meat, after suffering the first fiscal-year loss in more than 30 years.