Smithfield Foods is on the hunt for deals in smoked ham, bacon and frozen meatballs as they look to add value to their brand by acquiring branded packaged meats companies. Potential candidates include Sara Lee Corp. and People’s Food Holdings Ltd.
According to Bloomberg, the Virginia-based company may seek purchases in the packaged-meal industry after canceling a plan to purchase Spain’s Campofrio Foods Group SA. The deal was dropped due to “adverse” economic conditions in Europe and after Smithfield shares slid 17 percent.
Smithfield reported a profit last fiscal year, marking the first time in three years the company posted a profit. Mark Greenwood of AgStar told Bloomberg that Smithfield earnings are projected to fall this year, and Smithfield could pursue smaller deals in fast growing economies.
“Smithfield is trying to increase value by adding value to their brand,” said Greenwood, who oversees $1.4 billion in loans and leases to the hog industry. “In previous years they may have tried to grow more by raising more pigs. Having some extra value with a brand, you can at least charge more for that product than doing strictly commodity.”
Smithfield markets more than 50 brands of pork products and employs more than 52,000 workers globally, making it the world’s largest pork producers and processor.