CHICAGO — Shuanghui International Holdings Ltd., China’s biggest pork producer, has agreed to acquire Smithfield Foods Inc. for about $4.72 billion to boost supplies for the nation that’s the biggest consumer of the meat.
Closely held Shuanghui, parent of Henan Shuanghui Investment & Development Co., will pay $34 a share for the Smithfield, Va.-based producer, the companies said Wednesday in a statement. The offer is 31 percent more than Tuesday’s closing share price. Smithfield’s shares closed Wednesday at $33.35 up $7.38 or 28.4 percent.
China’s consumption of pork is rising with the expansion of its middle class while questions are being asked about the safety of the country’s food supply. Smithfield’s livestock unit is the world’s largest hog producer, raising about 15.8 million a year, according to the company’s website.
“China is a large and growing market,” Smithfield CEO C. Larry Pope said in a conference call.
“Asia as a whole is a tremendous and growing export opportunity for Smithfield.”
Valued at $7.1 billion including debt, the deal would be the largest for a meat producer and the biggest Chinese takeover of a U.S. company, according to data compiled by Bloomberg.
JBS, the Brazilian parent of JBS USA in Greeley, and Charoen Pokphand Foods were also preparing bids for Smithfield, said people familiar with the matter. Under the terms of its agreement with Shuanghui, Smithfield has 30 days to continue talks with CP Foods and JBS.
