Campofrío and Groupe Smithfield will merge

by Editor
Tuesday, July 01, 2008

The Boards of Directors of Campofrío and Groupe Smithfield have approved a merger of equals expected to be completed by the end of 2008.

The integration, by means of absorption of Groupe Smithfield by Campofrío, will create the leading European processed meat company and one of the 5 largest worldwide, with €2.1 billion of turnover and €190 million of EBITDA, according to pro-forma combined figures as of December 2007.

The company will remain listed on the Madrid and Barcelona Stock Exchange. Major shareholders will include Smithfield Foods (37%), Oaktree Capital (24%), Pedro and Fernando Ballvé (12%), Díaz Family (5%), Caja Burgos (4%) and QMC (2%).

The merger is subject to an exemption to be issued by the CNMV, allowing Smithfield Foods Inc. to maintain a shareholding in excess of 30% without having to launch a mandatory takeover bid for 100% of Campofrío.

The new firm will adopt Campofrío’s corporate identity, will keep Madrid’s headquarters and will have a staff of more than 11,800 employees, as well as a strong presence, in Spain, France, Belgium, Portugal and The Netherlands, where the company is leader, and in Romania, Russia, Germany, the UK and Italy, where it has a significant presence.

The transaction, which will create value as a result of the complementarities existing between both companies in terms of geographic presence, know-how, and products, will make possible significant synergies for the newly created group right from the beginning, addressed to reach over €40 milliion yearly starting on year 2012.

Campofrío is one of the leading players in the meat sector in Spain and a benchmark food company in Spain and Europe. With 5.198 employees, the turnover of the Campofrío Group was of €968 million in 2007.

Groupe Smithfield is the joint venture between Smithfield Foods and funds controlled by Oaktree Capital Management with an annual sales total of €1.2 billion.