Pork producer Smithfield Foods Inc. on Thursday completed its sale to Shuanghui International Holdings Ltd., the largest shareholder of China’s biggest meat processor.
The $34 per share deal approved by shareholders earlier this week is the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion including debt. The Smithfield, Va., company’s sale to Shuanghui comes at a time of serious food safety problems in China, some of which have involved Shuanghui, which owns food and logistics enterprises.
The deal marked a new era for the world’s biggest pork producer and processor and would unlock growth opportunities in the Chinese market, said Smithfield CEO Larry Pope in a statement. He added that Smithfield “will continue to be defined by the strictest adherence to the highest standards of food safety and quality.”
Smithfield Foods, whose brands include Armour, Farmland and its namesake, was founded in 1936. It has grown to annual sales of $13 billion and has about 46,000 employees.
Farmland, which has its headquarters in Kansas City, Mo., operates a plant at 2323 S. Sheridan in Wichita, where it produces deli meats, hot dogs, sausage and hams, according to Farmland’s website.
The Wichita plant employs about 475 people. Smithfield officials have said the sale was not expected to affect operations or personnel at any of its sites.
Smithfield has said that the buyout and China’s growing demand for pork will be a boon for American agriculture and an opportunity to export to new markets. Smithfield’s existing management team will remain in place and Shuanghui will honor labor agreements with Smithfield workers.
The acquisition highlights what could be growing interest in American food by Chinese consumers. Foreign food, such as milk powder from New Zealand and vegetables from neighboring Asian countries, is prized by Chinese consumers because of the frequent domestic food safety scandals.
Earlier this month, a U.S. committee that reviews mergers between American and overseas companies for national-security implications cleared the deal.