One of Smithfield Foods‘ biggest investors plans to drop its fight against the pork processor in light of its planned $4.7 billion sale to a Chinese meat producer.
The Continental Grain Company said on Monday that it had chosen to exit its roughly 6 percent position in Smithfield and wouldn’t challenge the pork company’s planned deal with Shuanghui International.
“Continental Grain congratulates Smithfield on the proposed merger with Shuanghui International,†Paul J. Fribourg, Continental Grain’s chairman and chief executive, said in a statement. “We have been advocating for value creation and are pleased that the Smithfield board of directors and management are being proactive in realizing value for the benefit of all of its shareholders.â€
Continental Grain’s plan has been a focus of attention since the Smithfield deal was announced last Wednesday.
The company gained a stake in Smithfield about six years ago, when it bought Premium Standard Farms. But it called attention to the pork producer in March when the agricultural concern â€" one of the country’s biggest privately held companies â€" called for a break-up.
In late April, the shareholder strongly suggested that it would begin a proxy fight at Smithfield, including by naming a slate of directors.
Smithfield’s chief executive, C. Larry Pope, told DealBook last week that he believed Shuanghui was motivated by keeping the American company in one piece.
People close to the Chinese meat producer said that while Continental Grain’s campaign wasn’t a factor in the deal timing, the would-be buyer likes Smithfield’s vertically integrated model, which runs from raising hogs to slaughtering them and producing ham and pork.
