Smithfield Halts Campofrio Deal
A declining stock price and continued economic struggles in Europe prompted Smithfield Foods Inc. to call off its proposed takeover of Spain’s Campofrio Food Group S.A.
"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 interest of our shareholders to terminate negotiations at this time,” said C. Larry Pope, Smithfield’s president/CEO. “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."
As Campofrio's largest shareholder, Pope said Smithfield remains “committed to holding our 37 percent stake…and supporting the company's continued growth and development as Europe's leading packaged meats company. We will continue to look for ways to capture and enhance synergies between Campofrio and Smithfield for the companies' mutual benefit, despite the inability merge the companies at the present time," Pope noted.
As the world's largest pork processor and hog producer with revenues exceeding $11 billion in fiscal 2010. Smithfield Foods is also the leader in numerous packaged meats categories, inclusive of national brands and regional powerhouses in the United States, along with some of the best-known European brands.