SUBSCRIBE

Breaking News on Food, Beverage & Supplement Development - Asia PacificEU edition | US edition

Headlines > Business

Read more breaking news

 

 

Fresh from Smithfield buy, WH Group readies for biggest IPO in a year

By RJ Whitehead , 10-Apr-2014

Fresh from Smithfield buy, WH Group readies for biggest IPO in a year

Chinese pork producer WH Group, which last year bought US pork giant Smithfield Foods, hopes to raise more than US$5bn in what would be the world's biggest initial public offering for a year when it lists in Hong Kong later this month.

The Henan-based firm was formerly known as Shuanghui International Holdings, and stands to raise up to US$5.3bn if it sells its shares at the top-end of an indicative price range of HK$8.00-HK$11.25 each.

Second-biggest food IPO

The WH Group listing would be the world's second-biggest ever food and beverage IPO after Kraft Food’s US$8.7bn deal in June 2001.

Having seen a term sheet this week concerning the sale, the Wall Street Journal also reported that the IPO has an upsize option to sell 20% more shares, of which all are from existing shareholders, to boost the deal size to up to US$6.4 billion if the demand is strong.

The valuation of the IPO is lower than the company's expectations amid disappointing performances of high-profile new listings in recent months. WH Group plans to use most of the proceeds from the offering to repay debt the company took on to buy Smithfield just eight months ago, WSJ reported.

The company also plans to increase its import of fresh pork from Smithfield in the US, where the price of pork has been about half that in China over the past five years, and sell in China to enhance the group's profitability.

Big in America

WH Group is the world's largest pork company and is involved in the production, slaughter and distribution of the meat, a key ingredient in Chinese cuisine. The company’s products include Smithfield ham, Carando pepperoni and Farmland bacon in the United States

Last year, WH agreed to buy Smithfield Foods in a deal valuing Smithfield at US$7.1bn, making it the largest ever Chinese acquisition of a US company. The Chinese company’s history dates back to 1958, when it started operating as Luohe Cold Storage to process and store perishables in Luohe, in China's central Henan province.

Pricing for the IPO is slated for April 22 and the company is scheduled to list on the Hong Kong Stock Exchange on April 30, according to WSJ’s take on the term sheet.

Related products

Related suppliers

Key Industry Events

 

Access all events listing

Our events, Events from partners...