NEW YORK — Shares of Smithfield Foods Inc. soared more than 5 percent Tuesday on reports that the hog producer might be ripe for a takeover by Brazilian meat giant JBS.
THE SPARK: JBS may try to revive talks with the Smithfield, Va. pork producer, according to reports published by Brazilian publication Valor Economico. The company recently bought a majority stake in chicken producer Pilgrim's Pride Corp. for $800 million as the company restructured. Smithfield said it would not comment on rumors. JBS did not a call eeking comment.
THE BIG PICTURE: With the economy still hurting, investors like to see large deals, which can signal growth in the economy. Smithfield's total revenue last year was $11.2 billion. A buyout would provide cash and stability to Smithfield, which lost $101.4 million for the fiscal year. The company narrowed its loss from the prior year but is still struggling with supply and demand and volatile feed costs.
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