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

November 5, 2013


By Fiona Lau

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

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

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

Shuanghui completed the US$4.7bn acquisition of Smithfield in late September. The transaction, valued at US$7.1bn including debt, is the biggest acquisition of a US company by a Chinese firm.

Bank of China and Morgan Stanley have together provided US$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 the Hong Kong IPO market, which has recently lost the long-awaited IPO of Alibaba Group to the US.

The other jumbo Hong Kong IPO scheduled is the US$4bn-$5bn proposed spin-off of Hong Kong Electric from Hong Kong-listed Power Assets. The deal is expected to hit the market in January 2014.

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