Smithfield Shareholder Calls for Breakup over Chinese Buyout

Jun 17, 2013

Smithfield Shareholder Calls for Breakup over Chinese Buyout

One of the largest shareholders in Smithfield Foods Inc. is calling for a breakup instead of following through with a planned $4.7-billion takeover by Chinese meat processor, Shuanghui International Holdings Ltd.

The shareholder, Starboard Value LP who owns 5.7 percent stake in the company, suggests that Smithfield may be worth “well in excess” of the $34 per share deal offered by Shuanghui. Starboard has long advocated that segments of Smithfields operations are worth more separate than rolled in one.

In a letter addressed to Smithfield’s board, Starboard wrote, “we believe there are numerous interested parties for each of the company’s operating divisions, and that a piece-by-piece sale of the company’s businesses could result in greater value to the company’s shareholders than the proposed merger.”

Continental Grain Company, one of Smithfield’s former biggest investors had also called for a breakup of the company, but instead of picking a battle, sold off its entire stake in the company earlier this month.

Smithfield’s shares were up 2 percent in premarket trading on Monday, but were below Shuanghui offer.

Video: How farmers are protecting the soil and our food security | DW Documentary

For a long time, soil was all but ignored. But for years, the valuable humus layer has been thinning. Farmers in Brandenburg are clearly feeling the effects of this on their sandy fields. Many are now taking steps to prepare their farms for the future.

Years of drought, record rainfall and failed harvests: we are becoming increasingly aware of how sensitively our environment reacts to extreme weather conditions. Farmers' livelihoods are at stake. So is the ability of consumers to afford food.

For a few years now, agriculture that focuses solely on maximum yields has been regarded with increasing skepticism. It is becoming more and more clear just how dependent we are on healthy soils.

Brandenburg is the federal state with the worst soil quality in Germany. The already thin, fertile humus layer has been shrinking for decades. Researchers and farmers who are keen to experiment are combating these developments and looking for solutions. Priority is being given to building up the humus layer, which consists of microorganisms and fungi, as well as springtails, small worms and centipedes.

For Lena and Philipp Adler, two young vegetable farmers, the tiny soil creatures are invaluable helpers. On their three-hectare organic farm, they rely on simple, mechanical weed control, fallow areas where the soil can recover, and diversity. Conventional farmer Mark Dümichen also does everything he can to protect soil life on his land. For years, he has not tilled the soil after the harvest and sows directly into the field. His yields have stabilized since he began to work this way.

Isabella Krause from Regionalwert AG Berlin-Brandenburg is convinced after the experiences of the last hot summers that new crops will thrive on Brandenburg's fields in the long term. She has founded a network of farmers who are promoting the cultivation of chickpeas with support from the scientific community.