New | China’s Smithfield Foods sells stake in Campofrio Food Group

Smithfield Foods has sold its entire 37 per cent stake in Campofrio Food Group for US$354 million (HK$2.74 billion) in cash to Alfa, a Mexican conglomerate whose businesses include food, IT and automotive engine parts, the parent company of Smithfield said in a statement on Thursday.

Smithfield is a wholly owned subsidiary of WH Group, the largest pork producer in China and the world. Campofrio is one of Europe’s biggest packaged meat firms.

“The transaction will further strengthen WH Group’s financial fundamentals and improve our capital structure. This will lay a solid foundation for our future global expansion,” WH Chairman and Chief Executive Officer Wan Long said.

He added they are looking “to further strengthen our leadership in the global pork industry. With the European Union remaining a strategic focus, we will (be) continuing to identify potential strategic acquisitions.”

WH’s Hong Kong stock exchange announcement said “the transaction would result in a lump sum cash inflow and strengthen the company’s balance sheet.”

C. Larry Pope, Smithfield’s president and CEO, said the transaction would generate cash for the company, strengthen its balance sheet and cut financing costs.