Smithfield in talks over Caroli, Campofrio eyes Principal Construct

Smithfield, the world”s leading company on the pork market with annual turnover of $10 billion, is in talks for the takeover of 60% in Caroli, a company developed by Arab investors, market sources say.

Officials from Smithfield and Caroli refused to comment on the transaction and even went to great lengths to deny the existence of any takeover negotiations. However, changes are already underway at Caroli”s Bucharest branch – according to sources, a Smithfield official has already been appointed manager and half of Caroli”s sales agents have been fired.

In another development, Tabco Campofrio, the Romanian branch of the Spanish company Campofrio Alimentacion, in which Smithfield holds a 22% stake, is considering the acquisition of another cold meats producer, Principal Construct. Principal Construct was developed by local entrepreneur Claudiu Ciuciureanu. He sold the company some months back to the shareholders in Murfatlar Romania, the country”s leading wine maker. The Tabco Campofrio general manager, Ovidiu Wencz, declined to comment on the development.

The marketing manager for Murfatlar Romania, Radu Morar, said the owners of Murfatlar were not willing to sell their cold meats business and were in fact intending to develop it.

“We feel we made a good acquisition and we intend to develop this business to regain the market share the company once had,” he said. “We have never been interested in selling. We have invested 7 million euros in this company so far and have already started production.”

Last year Smithfield bought up most of the assets of the pig breeding farm Comtim Timisoara, as well as 50% in both Agroalim Distribution and Frigorifer Tulcea.

Tabco Campofrio is positioned on the upper market segment, while Caroli”s product portfolio covers mainly the medium and lower segments. One of Smithfield”s vice-presidents was expected in Bucharest yesterday, with the general manager of Campofrio Alimentacion due to arrive today. According to market sources, however, they do not have a joint schedule.

Murfatlar”s shareholders have not yet decided to sell, however they might be persuaded to enter negotiations if the price is right, sources say, especially after they recently conducted several speculative deals – such as taking over the mineral water producer Biborteni, a troubled company similar to Principal Construct. stelian.negrea@zf.ro