Chinese pork firm executives get $747m reward for Smithfield deal

Some of the products of WH Group are displayed in front of maps of Europe and China at a news conference on the company's IPO in Hong Kong on April 14, 2014. Chinese pork producer WH Group has issued shares worth US$597 million (S$747 million) t
Some of the products of WH Group are displayed in front of maps of Europe and China at a news conference on the company's IPO in Hong Kong on April 14, 2014. Chinese pork producer WH Group has issued shares worth US$597 million (S$747 million) to two of its executives as a reward for their contribution in the acquisition of US giant Smithfield Foods, a company filing showed. -- PHOTO: REUTERS

SHANGHAI (AFP) - Chinese pork producer WH Group has issued shares worth US$597 million (S$747 million) to two of its executives as a reward for their contribution in the acquisition of US giant Smithfield Foods, a company filing showed.

WH Group, formerly known as Shuanghui International Holdings, is the world's largest pork producer, and the company is seeking a Hong Kong listing to raise more than US$5 billion in what would be the world's biggest initial public offering (IPO) for a year.

In a listing document published on Tuesday on the WH Group website, the firm said chief executive and chairman Wan Long was issued 573.1 million shares last October.

Mr Yang Zhijun, an executive director in charge of investment, mergers and acquisitions, was also issued 245.6 million shares in the same month, the document showed.

The allotment will give them an approximately 3.92 per cent and 1.68 per cent stake respectively in WH Group upon completion of the firm's IPO.

The company said the share awards, with an estimated fair value of US$597 million at grant date, were "to recognise and reward their contributions to the acquisition of Smithfield".

The share allotment, part of WH Group's US$639 million share-based payouts last year, had cut into the company's profits, leading to a loss of US$67 million in 2013 compared to US$468 million of profit in 2012.

In May last year, WH Group, under the Shuanghui name, agreed to buy Smithfield Foods in a deal valuing Smithfield at US$7.1 billion, making it the largest ever Chinese acquisition of a US company.

The pork firm could not be reached by AFP for comment but its chief financial officer Guo Lijun had told state media the one-off non-cash share awards would have no impact on its operational results after it went public.

Based in central China's Henan province, WH Group is involved in the production, slaughter and distribution of pork, a key ingredient in Chinese cuisine. It is also a shareholder of Spanish meat firm Campofrio Food, according to its website.