SMITHFIELD, Va., June 30 /PRNewswire-FirstCall/ -- Smithfield Foods, Inc.
(NYSE: SFD) today announced that it has entered into an agreement with COFCO
Limited, China's largest national agricultural trading and processing company,
for the sale of 7,000,000 shares, or 4.95 percent of Smithfield's common
stock. The purchase price per share will be equal to the closing price of
Smithfield's Common Stock on the pricing date for the offering of the
company's Convertible Senior Notes, which was announced separately today. The
company plans to use the proceeds of the sale to repay indebtedness and for
other general corporate purposes.
'I am very pleased that COFCO has agreed to make this equity investment in
Smithfield. We have been working closely together and this investment
represents a significant step in cementing our relationship for the long
term,' stated C. Larry Pope, Smithfield's president and chief executive
officer.
'COFCO is a widely respected leader in China's food and agriculture
industry,' Mr. Pope said. 'China is experiencing rapid growth in pork
consumption and consumes more pork than the rest of the world combined. COFCO
has introduced Smithfield to many opportunities in China and we look forward
to continue working together.'
Mr. Gaoning Ning, the chairman of COFCO, said, 'Smithfield is the world's
largest producer and processor of pork. We look forward to building on our
existing commercial relationship and exploring growth opportunities in China's
food industry together.' In connection with the sale, Smithfield has agreed to
nominate Mr. Ning for election as a director at its 2008 annual shareholders'
meeting. COFCO's investment in Smithfield is passive in nature and the
purchase agreement contains standstill provisions.
Smithfield expects to close on an initial $63.1 million of the shares
promptly following the closing of Smithfield's convertible notes offering.
Settlement on the remainder of the shares will be subject to completion of
Hart-Scott-Rodino antitrust review.
Hogan & Hartson LLP and McGuire Woods LLP are serving as legal advisors to
Smithfield Foods.
Morgan Stanley & Co.
