A Chinese company is spending $4.7billion US cash to buy Smithfield Foods of Virginia, the largest hog-producing and pork-packing company in the Western world, in a deal described as a merger.
Shuanghui International Holdings Limited said the deal is worth $7.1 billion; besides buying the company's shares, it will assume Smithfield’s debts.
Shuanghui International is the majority shareholder of Henan Shuanghui investment & Development Co. , which is China's largest meat processing company.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Shuanghui will acquire all of the outstanding shares of Smithfield for $34 per share in cash.
That's 31 per cent higher than the stockmarket price of Smithfield shares before the deal was revealed.
Smithfield will become a private company. Current leadership and management will remain in place. The headquarters will remain in Smithfield, Va.
“It will be business as usual — only better — at Smithfield,” said chief executive officer Larry Pope.
“We do not anticipate any changes in how we do business operationally in the United States and throughout the world,” Pope said in a news release.
Shuanghui chairman Wan Long said the deal offers Smithfield an opportunity to market its products throughout China, which is the world’s largest producer and market for pork.
Shuanghui is committed to continuing the long-term growth of Smithfield, and continuing to work with American farmers, producers and suppliers who have been critical to Smithfield's success, he said.