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The Shuanghui Group building in Luohe, central China’s Henan Province [Xinhua]
The acquisition valued Smithfield at approximately $7.1 billion, including the assumption of Smithfield’s net debt.
“Together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the United States and around the world,” said Shuanghui chairman Wan Long.
The deal which is the biggest Chinese buyout of a US firm will be completed by the second half of 2013.
The controversy regarding the US livestock industry’s usage of the controversial feed additive ractopamine for more than a decade could have influenced the deal.
In February, China’s quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine told US agencies in Beijing that exporters had to provide additional documents to certify the US pork is ractopamine-free.
Russia has also in February, banned American beef, pork and turkey imports owing to the use of the chemical.
Meat industry experts in the US say the Russian ban is a significant loss in business.
Meanwhile, Smithfield said the deal will allow the firm to expand the sale of its brands abroad.
“This is a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture,” Smithfield chief executive Larry Pope said
Smithfield Foods is a 13-billion dollar global food company and the world’s largest pork processor and hog producer.
Shuanghui International and its subsidiaries are the majority shareholders of Henan Shuanghui Investment and Development Co., which is China’s largest meat processing enterprise and is publicly traded on the Shenzhen Stock Exchange.
With inputs from Agencies
