(Reuters) -Smithfield Foods on Monday made public its paperwork for its New York initial public offering as the maker of Farmland (NYSE:FPI) bacon and Farmer John sausages prepares for its U.S. stock market return after more than a decade.
Hong Kong-based WH Group (OTC:WHGLY), the world's largest pork producer that took Smithfield private in 2013 for $4.7 billion, will sell some of its shares in the Virginia-based company in the offering, alongside the company.
The company is spinning off its U.S. and Mexico businesses as it looks to unlock their value and boost Smithfield's access to capital markets.
WH Group said in October the IPO is expected to represent up to 20% of Smithfield's shares on a fully diluted basis and value the company at no less than $5.38 billion.
Smithfield reported a net income of $581 million in the nine months ended Sept. 29 on sales of $10.19 billion. That compares with a net loss of $2 million in the nine months ended Oct. 1, 2023 on sales of $10.64 billion.
Pork producers in China have come under pressure from declining consumer demand as the world's second-biggest economy has struggled in recent years, said Dennis Smith, commodity broker for Archer Financial Services.
"Demand took a freaking nose dive," Smith said. "Those guys took huge losses."
POISED FOR U.S. STOCK MARKET RETURN
Smithfield was founded in 1936 as a packing company in Virginia. Since then, it has grown into one of the major producers of packaged meats and fresh pork products.
The company was listed on the New York Stock Exchange from 1999 until its acquisition in 2013.
Smithfield, which separated its European operations last year, confidentially filed for the U.S. IPO on Oct. 4.
The IPO proceeds will be used for capital investments in infrastructure, automation and capacity expansion, Smithfield said.
Smithfield will list on the Nasdaq under the symbol "SFD."
Morgan Stanley (NYSE:MS), BofA Securities and Goldman Sachs are the lead underwriters.