Shuanghui Rallies on Parent Buyout of Smithfield: Shanghai MoverBloomberg News
Henan Shuanghui Investment & Development Co., China’s biggest listed pork processor, jumped the most in 29 months in Shenzhen trading after its parent company agreed to acquire Smithfield Foods Inc.
Shuanghui rose 8.7 percent to 42.86 yuan at the close, the biggest gain since Dec. 7, 2010. The Shanghai Composite Index slipped 0.3 percent. Closely held Shuanghui International Holdings Ltd. agreed to acquire the Smithfield, Virginia-based producer for about $4.72 billion, the companies said in a statement yesterday.
“Shuanghui already has a very leading industry position in China and it makes sense now for the company to expand overseas as part of its internationalization strategy,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “The acquisition will help Shuanghui to gain access to the U.S market and add to its global procurement chain.”
China is the world’s biggest consumer of pork. Demand is rising with the expansion of its middle class even as questions are being asked about the safety of the country’s food supply. Prices of wholesale pork are poised to rebound after plunging over the past three months after the discovery of more than 9,000 dead pigs floating in Shanghai’s Huangpu river.
Sichuan Gaojin Food Co., a Shenzhen-listed maker of pork products, gained 0.9 percent to 5.48 yuan.