Smithfield strengthens supply chain with swoop on Clougherty

By Oscar Rousseau contact

- Last updated on GMT

Smithfield Foods has taken more than a nibble out of Hormel Foods Corporation
Smithfield Foods has taken more than a nibble out of Hormel Foods Corporation

Related tags: Pork

Smithfield Foods has completed its acquisition of Clougherty Packing LLC in a cash deal worth $145m. 

Smithfield, which claims to the world’s largest pork processor, will gain three farms across the US in its takeover of American business Clougherty Packing, an expansion that Smithfield said would bolster its supply chain.

The three farms were previously operated by PFFJ LLC, which ran the pig farms in Arizona, California and Wyoming – all of which will be incorporated into Smithfield’s pork production chain. The acquisition will also see Smithfield​ assume control of Clougherty Packing’s brands Farmer John and Saag’s.

In addition to the meat brands and the farms, Smithfield is set to acquire two meat processing facilities, which will further aid a business that claims to be worth $14bn.

Creating ‘new value’

Initial talks for the acquisition began in November 2015, when Smithfield entered into negotiations with Hormel Foods Corporation to buy Clougherty Packing.

We are proud to officially welcome Farmer John to our growing Smithfield family – a move that has already created new value for our combined operations and set the stage for a strong 2017,​” said Kenneth Sullivan, president and CEO of Smithfield Foods in a press statement.

With this one acquisition, we’ve created a more efficient supply chain coast-to-coast and expanded our operations and product portfolio, as well as our customer and consumer base.​”

The closing of the deal has been followed by sale approval from the Committee on Foreign Investment in the United States. This body handled the deal as Smithfield is a wholly-owned subsidiary of China-based WH Group. So despite it being a seemingly all-US deal, there is Chinese interest.

Related topics: Meat

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