Smithfield Foods Inc., the world’s largest pork producer, has filed for its initial public offering in the US, joining a growing number of firms pursuing market debuts this year.
The company and an indirectly-owned subsidiary of its owner, Hong Kong-listed WH Group Ltd., are both offering shares in the listing, according to a filing with the US Securities and Exchange Commission on Monday. WH Group will maintain control of the company after the listing.
WH Group had already said it planned to sell 20% of Smithfield in a listing expected to value the company at US$5.38 billion ($7.32 billion) or more. The IPO comes more than a decade after WH Group acquired the maker of Farmer John sausages for US$4.7 billion — then the largest Chinese takeover of a US company.
The potential listing adds to expectations that the US IPO market’s volume could return to its pre-pandemic average. First-time share sales on US exchanges raised US$43 billion last year, which remains below the US$58 billion average in the decade before 2020, data compiled by Bloomberg show.
Smithfield had net income of US$581 million on revenue of US$10.2 billion for the nine months ending Sept. 29, compared with a net loss of US$2 million on revenue of US$10.6 billion in the corresponding period a year earlier, the filing shows.
The Smithfield, Virginia-based company makes packaged meats and fresh pork and sells them under brands including Eckrich and Nathan’s Famous as well as its eponymous line, the filing shows. Smithfield has about 34,000 employees in the US and around 2,500 in Mexico, according to the filing.
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Smithfield’s offering is being led by Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc. the filing shows. The company is planning to go public on the Nasdaq Global Select Market under the symbol SFD.
The proceeds from the IPO would be used for general corporate purposes, including capital investments in infrastructure, automation and capacity expansion, Smithfield said in the filing.
WH Group’s rise
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Henan Shuanghui Investment & Development Co., WH Group’s mainland-listed unit, is China’s largest pork producer.
WH Group was founded by Chinese billionaire Wan Long, who is still one of the largest shareholders of the company. Born in 1940, Wan joined WH Group’s predecessor Luohe Cold Storage in 1968 and turned the little-known company into a food giant. The firm raised almost US$2 billion from its IPO in Hong Kong in 2014.
However, as the company grew and Wan got older, a bitter family row developed between the founder and his son, Wan Hongjian, over succession and management issues. The two publicly turned against each other in 2021, pushing down WH Group’s share price.
WH Group stock rose at the open in Hong Kong on Tuesday before trading down 1.2% as of 12.13pm.
