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Smithfield Foods: Activists and Acquisit...

Chen, Ming-Jer, Ji...

Case

Smithfield Foods: Activists and Acquisitions

Chen, Ming-Jer; Jia, Ruo; Yemen, Gerry

S-0308 | Published April 1, 2019 | 20 pages Case

Collection: Darden School of Business

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This research-based case uses the circumstances surrounding Virginia-based Smithfield Foods' (Smithfield's) buyout offers from multiple foreign firms to examine the political and cultural constraints of a regionally rooted global firm in pursuing its strategic objectives. Smithfield's senior leadership receives offers from three firms, ShuangHui International (ShuangHui), JBS S.A. (JBS), and Charoen Pokphand Foods (CPF), based in China, Brazil, and Thailand, respectively, to acquire all of Smithfield's outstanding assets and liabilities. Smithfield's history was one of aggressive growth through acquisition, skirting government regulations, and truculence with respect to labor and environmental activists. However, as revenues plateaued, the firm faced increasing investor pressure to either trim costs or sell off portions of the company to improve shareholder value. Though the company's operations crossed continents, its identity and brand were tied to southeastern Virginia. Would it be best for the company or its shareholders to sell? If so, to whom? What risks would the firm face, politically and culturally, if it decided to do so? Because of its many details, the instructor teaching this case can approach the content from a number of strategic or leadership perspectives.

To understand the political and cultural risks of a US company with a strong regional or national brand identity being acquired by a foreign firm To anticipate when a firm is likely to be met with a "light touch" or a more heavy-handed postmerger integration experience To explore the role that leadership styles play in affecting a company's brand image and strategy execution To identify when corporate social responsibility (CSR) efforts can raise a company's attractiveness to outside stakeholders