Shuanghui Int'l plans US$5bn HK IPO in 2014-sources


By Fiona Lau

HONG KONG, Nov 5 (IFR) - China's Shuanghui InternationalHoldings is to follow up its record-breaking acquisition of USpork producer Smithfield Foods with a US$5bn flotation of thecombined company in Hong Kong next year.

According to two sources with direct knowledge of thematter, Shuanghui has mandated six banks as sponsors for theIPO: BOC International, Citic Securities International, GoldmanSachs, Morgan Stanley, Standard Chartered and UBS are the banks.

The deal size could be as big as US$6bn, depending on marketconditions, according to one of the sources, and is expected inthe second quarter of 2014.

Shuanghui completed the US$4.7bn acquisition of Smithfieldin late September. The transaction, valued at US$7.1bn includingdebt, is the biggest acquisition of a US company by a Chinesefirm.

Bank of China and Morgan Stanley have together providedUS$7bn of loans to finance the acquisition. Goldman Sachs,meanwhile, is a private equity investor in Shuanghui.

The deal is expected to bring a much-needed boost to theHong Kong IPO market, which has recently lost the long-awaitedIPO of Alibaba Group to the US.

The other jumbo Hong Kong IPO scheduled is the US$4bn-$5bnproposed spin-off of Hong Kong Electric from Hong Kong-listedPower Assets. The deal is expected to hit the market in January2014.

Should the Shuanghui IPO surpass the US$5bn mark, the dealwill become the biggest IPO in Hong Kong since October 2010,when AIA Group raised US$20.4bn.

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