Smithfield Foods is actively considering a return to the U.S. stock market, with the support of its Chinese parent company, WH Group, according to a recent report from The Wall Street Journal. The pork producer is in collaboration with banks to potentially go public in the U.S., with plans possibly materializing as early as next year.
Smithfield mentioned that the idea of going public is periodically discussed and consistently assessed. However, the company clarified that there is currently no definitive plan or set timetable for such a move.
WH Group acquired Smithfield in 2013 for $4.7 billion, marking a significant acquisition of an American business by a Chinese company at that time. Following the acquisition, Smithfield was delisted from the New York Stock Exchange. Subsequently, WH Group became the world’s largest hog farmer and pork producer, eventually going public in Hong Kong in 2014 and raising over $2.3 billion.
Recently, WH Group has faced challenges with its shares trading near record lows, influenced by factors such as the African swine fever outbreak in China. The potential return of Smithfield to the U.S. stock market aligns with a period of adversity for the American meat industry, marked by oversupply issues and fluctuating demand.
The overarching goal of WH Group’s plans for Smithfield is to enhance the company’s valuation. However, the Chinese ownership of Smithfield has attracted criticism in the U.S., with concerns raised about the security of the American food supply chain.
While the return of Smithfield to the U.S. stock market remains uncertain, it is part of a broader trend, with several major meat companies, including Brazil’s JBS, also considering similar moves. This dynamic reflects the challenges and opportunities facing the global meat industry amidst evolving market conditions.