Smithfield Foods files for public offering on US stock exchange

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Smithfield’s return to the public market comes amid pricing pressures in the pork industry and mounting public scrutiny over U.S. companies’ ties to China. A public listing would allow owner WH Group, the world’s largest pork producer, to focus on its Chinese operations while giving Smithfield the flexibility to raise capital in a difficult economic environment.

Smithfield would use the proceeds from the listing to expand its packaged meats capacity and further invest in infrastructure and automation, according to a plan approved by shareholders on Dec. 6. The Smithfield, Virginia-based company has recently moved to
offload a significant portion of its hog supply
in efforts to cut operating costs and focus more on packaged meats.

Pork prices have declined faster than hog prices, pressuring processor margins and prompting a slowdown in production, according to a report from
the U.S. Department of Agriculture
. Strong production levels earlier this year have depressed pork prices, while rising livestock costs and a stronger U.S. dollar have hampered exports.

As pork producers struggle with declining margins, Smithfield has also faced questions about its relationship to China as congressional lawmakers look to clamp down on Chinese ownership of U.S. farmland. WH Group bought Smithfield more than a decade ago for $4.7 billion, and the acquisition was called the biggest “Chinese takeover” of a U.S. company at the time.

Since the purchase of Smithfield in 2013, WH Group has become one of the
largest Chinese landholders of U.S. farmland
. As trade tensions with China flare, U.S. lawmakers have looked to restrict farmland access to entities associated with the country.

Spinning off Smithfield’s U.S. and Mexico businesses would enhance the pork producer’s “market reputation and credibility” by providing more transparency to investors in the United States, WH Group said in a previous filing. Smithfield previously carved out its
European operations
in advance of the proposed listing.