ST. CHARLES – A local food processing plant that employs hundreds appears poised to have a new international corporate parent.
This week, Smithfield Foods announced it had reached an agreement to sell its operations to Hong Kong-based Shuanghui International Holdings Ltd.
The $4.7 billion deal, which is pending regulatory approval, could close in the second half of the year, transferring control of more than 400 farms and brands, including Armour, Eckrich, Smithfield, Farmland and Kretschmar, among others, to China’s largest meat producer.
Locally, Virginia-based Smithfield operates an Armour-Eckrich-branded food processing plant at 410 Kirk Road in St. Charles. The plant employs more than 300 people, according to records kept by the city of St. Charles’ Economic Development Department.
In mid-2008, Armour-Eckrich laid off about 100 workers from that St. Charles plant, but didn’t provide a reason for the reductions at the time.
The St. Charles plant, along with Smithfield’s other assets, were to be included in the deal.
The sale of Smithfield’s operations comes amid pressure from shareholders concerned over years of losses against such competitors as Hormel Foods and Tyson Foods.
Smithfield posted a negative return of 18 percent in the last five years, the second-worst performance of any U.S. food company with annual sales of $10 billion or more, according to data compiled by Bloomberg News.
Shuanghui also agreed to take on Smithfield’s debt as part of the sale.
Smithfield’s senior managers will stay on after Shuanghui completes the acquisition. Smithfield employs about 46,000 workers.
“It will be business as usual – only better – at Smithfield,” C. Larry Pope, Smithfield’s CEO and president, said in a prepared statement announcing the sale. “We do not anticipate any changes in how we do business operationally in the United States and throughout the world.”
• Bloomberg News contributed to this report.