1 Jun 2013

US and China pork firms to merge

8:25 am on 1 June 2013

The biggest pork firms in China and the United States intend to join forces in a deal worth $US4.7 billion.

Shuanghui International has agreed to pay cash for Smithfield Foods of Virginia, which, including debt, values the firm at $US7.1 billion.

The BBC reports the deal will be the largest takeover of a US company by a Chinese rival.

However, rival bidders may emerge since Smithfield has another 30 days to hold talks with other interested parties.

Charoen Pokphand Foods of Thailand says it considered bidding for the company.

Smithfield, which owns the Farmland, Armour and Healthy Ones brands, said the deal will allow the firm to expand the sale of its brands abroad.

''We do not anticipate any changes in how we do business operationally in the United States and throughout the world,'' said chief executive Larry Pope in a statement.

Smithfield said it has accepted Shuanghui's bid of $US34 per share for the company, which was more than a third higher than Tuesday's closing price.

The deal is expected to close in the second half of the year, after which Smithfield's will also cease to be publicly traded.

Shares of Smithfield rose more than 28% to close at $33.35 in US trade on Wednesday.