Tag: carveout

Smithfield Foods announced Tuesday that its European operations have been carved into an independent subsidiary. The action takes place a little over a month after Smithfield’s Chinese parent company, WH Group, which has its headquarters in Hong Kong, announced plans to take the company public in the United States. 

Smithfield Europe, now to be called Morliny Foods, will operate as a subsidiary of the WH Group, like Virginia-based Smithfield Foods. 

“It’s the right time to establish our North American and European operations as stand-alone businesses empowered to execute distinct strategies addressing different market environments and opportunities,” Smithfield Foods President and CEO Shane Smith stated in a news release. “In doing so, we provide our respective management teams with increased decision-making agility, optimizing the performance and prospects for each business.”

A spokesperson for Smithfield declined to comment beyond the press release Tuesday. 

Smithfield Foods was delisted on the New York Stock Exchange after WH Group purchased the company in 2013 for $4.7 billion. On July 14, the parent company announced that Smithfield Foods businesses operated in the United States and Mexico would be listed on either the New York Stock Exchange or Nasdaq. 

S&P Global Ratings released a research update Tuesday that stated Smithfield Foods’ credit profile has been unaffected by the European carveout and that WH Group is likely to remain in charge of the business.

“While we are aware of WH Group’s proposal to list Smithfield on a U.S. stock exchange, we currently believe the parent would maintain a substantial long-term majority stake in the business,” the credit reporting agency said. “As such, we continue to believe Smithfield remains important to the group’s long-term strategies and is unlikely to be sold.” 

The largest pork producer in the United States, Smithfield has about 35,000 employees nationwide, according to a company spokesperson.

In January 2023, Gov. Glenn Youngkin made headlines for taking the Southern Virginia Megasite at Berry Hill out of the running for a $3.5 billion Ford Motor Co. electric vehicle battery factory over concerns about a project partner’s ties to the Chinese government. The same year, he signed a bill prohibiting foreign adversaries of the United States from “acquiring or transferring any interest in agricultural land.”

In March 2023, Smith told the Wall Street Journal that Smithfield Foods is “as American today as we were in 2013.”