Shuanghui International Holdings Ltd., the Chinese company that bought the world’s biggest pork supplier this year, will join Alfa SAB (ALFAA)’s Sigma Alimentos food unit in a raised bid for Spain’s Campofrio Food Group SA. (CFG)
Shuanghui, based in Hong Kong, and Mexico’s Sigma will increase the bid for Campofrio to 6.90 euros a share from 6.80 euros, the companies said in a joint statement today. That values the company at about 705 million euros ($966 million). Sigma and Shuanghui plan to delist Campofrio after the transaction.
Spanish companies are attracting foreign investment as the nation’s economy emerges from a five-year slump, with the Ibex 35 benchmark index gaining 19 percent this year. Microsoft Corp. founder Bill Gates bought a 113.5 million-euro stake in Spanish builder Fomento de Construcciones & Contratas SA in October.
Shuanghui will indirectly hold its 37 percent stake in Campofrio after the offer, and Sigma Alimentos, Mexico’s largest processed-meats producer, will indirectly hold its own 45 percent stake plus shares acquired in the bid. Last month, Sigma Alimentos offered 6.80 euros a share for Madrid-based sausage maker Campofrio.
“Shares are falling mostly because some investors were speculating on a potential counterbid,” said Francisco Salvador, a Madrid-based strategist at FGA/MG Valores. “These two strategic partners will bring more stability to Campofrio’s structure, which is positive for all shareholders in the long term.”
Sigma Alimentos will name four board members for investment vehicle Sigma Europa and Campofrio, including Pedro Ballve as chairman, while Shuanghui will name three, including a vice chairman, the companies said. Sigma Alimentos and Shuanghui have also agreed to explore future business opportunities and avoid potential conflicts, they said.
Shuanghui previously considered reducing its 37 percent stake in Campofrio to less than 30 percent. In Spain, shareholders that acquire 30 percent or more of a company are required by law to make a full takeover bid.
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