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Smithfield Foods Inc. (SFD)
May 29, 2013 8:30 am ET
Keira L. Lombardo - Vice President of Investor Relations and Corporate Communications
C. Larry Pope - Chief Executive Officer, President, Executive Director and Member of Executive Committee
Christine McCracken - Cleveland Research Company
Kenneth B. Zaslow - BMO Capital Markets U.S.
Farha Aslam - Stephens Inc., Research Division
Heather L. Jones - BB&T Capital Markets, Research Division
Previous Statements by SFD
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[Operator Instructions] As a reminder, ladies and gentlemen, this call is being recorded. An audio archive of this call will be available shortly after the call has included. Now I'd like to turn the call over to Ms. Lombardo. Ms. Lombardo, please go ahead.
Keira L. Lombardo
Thank you, operator. Good morning, everyone, and welcome to our investor conference call to discuss the strategic combination of Smithfield Foods and Shuanghui International Holdings Limited, which was announced earlier this morning. We would like to caution you that in today's call, there may be forward-looking statements within the meaning of several securities laws. In light of the the risks and uncertainties involved, we encourage you to read the forward-looking information section of the company's 10-K for fiscal year 2012, as well as the disclosures contained in our press release issued this morning. You can ask access the 10-K in our press release on our website at smithfieldfoods.com. Please review our Safe Harbor language found in our press release and in our SEC filings, which describe factors that could cause our actual results to differ materially from those projected by us in our forward-looking statements. With that, I'll first turn the call over to Mr. Yang, Managing Director of Shuanghui International.
Good morning. I'm happy to be with you. We are excited about this transaction. I'm still learning to speak English, but I want to say 3 things about Shuanghui and Smithfield. Together, we can be a global leader in animal protein. China and the U.S. are the most important markets. We are #1 in China. Smithfield is #1 in the U.S. No other combination has such a great opportunity. Chinese consumers like American pork. U.S. farmers want foreign markets for their pork. Growing this export market will be a win-win for both countries.
Continuity is very important to Shuanghui. We have worked with Smithfield for many years. We like it the way it is. We will not change the people, the places, the products, the leaders. We want business to stay the same, but better. This is a great deal for both our companies. We will try to move forward quickly. Thank you.
C. Larry Pope
Thank you, Mr. Yang. This is Larry Pope. Good morning, everyone, and thank you for joining us on such short notice. This is an exciting day for Smithfield, and I'm eager to take you through the benefits of a Shuanghui and Smithfield strategic combination. The combination of Shuanghui and Smithfield, which was unanimously approved by the Board of Directors of both companies, will create a leading vertically integrated global pork enterprise and set the global industry standard in food safety, environmental stewardship and animal welfare. Our board is pleased with the outcome of the process leading to this transaction, and we unanimously believe it is in the best interest of Smithfield and its shareholders.
First, this is an attractive and compelling transaction for the shareholders of Smithfield. The all-cash transaction will provide immediate and certain value and at a great price. Under the terms of the agreement, Smithfield shareholders will receive USD 34 per share in cash.
In addition to this transaction's significant value, the combination of Shuanghui and Smithfield makes great strategic sense. China is a large and growing market and is already the world's single largest protein-consuming country. In addition, Asia as a whole is a tremendous and growing export opportunity for Smithfield. The U.S. agriculture industry, with our best practices in food safety and sustainability and world-class logistics and efficiency, make America a low-cost, high-quality producer of hogs and pork products in the world. This transaction will give Smithfield new channels to market and a strong distribution network in China. We expect to help meet the growing demand for pork in China by exporting high-quality meat products from the United States, while continuing to serve markets in the United States and around the world.
In short, this transaction is good for our business and for the producers and suppliers with whom we work. By combining Shuanghui and Smithfield, we will accelerate both companies' strategic plans, broaden our market reach and create exciting new growth opportunities. Not only is this a great transaction for our company and our customers, there are also significant benefits for American farmers and U.S. agriculture. It creates a stronger Smithfield with more resources to grow and meet increasing global demand for high-quality pork. Shuanghui is committed to investing in Smithfield to produce more food, more jobs and more value in the United States.