“(Reuters) – China’s Shuanghui International agreed on Wednesday to buy Smithfield Foods (SFD.N) for $4.7 billion in cash, in a deal that will increase the flow of U.S.-made pork to the world’s largest consumer of the meat.
The agreement comes after Smithfield’s largest shareholder agitated for change at the company, including a call to break up the Virginia-based pork producer.
The deal will be subject to review by the U.S. Committee on Foreign Investment, Smithfield said in a statement, which will come at a time of testy relations between the U.S. and China on matters of cross-border transactions.
China is also the third-largest market for U.S. pork – a brand of meat in high demand lately, as China suffers through another series of embarrassing food safety scandals, involving everything from rats to pigs.
The price of Shuanghui’s offer is $34 per share, a 31 percent premium to Smithfield’s stock price. Shuanghui will assume $2.4 billion of Smithfield’s debt
Shuanghui has promised to maintain Smithfield’s operations, staff and management. The thrust of the deal is to send the U.S. made pork to China, a factor that one person familiar with the matter said would help during Shuanghui’s CFIUS review…..”Twitter