Smithfield Foods, the American meat processing company, has been purchased by the Chinese company Shuanghui International for $4.7 billion, pending approval from the U.S. Committee on Foreign Investment.
According to The New York Times, the deal, which Smithfield announced this morning, is one of the biggest moves by a Chinese company in the U.S. to date. Shuanghui, the largest pork processor in China, agreed to pay $34 a share, 31 percent over Smithfield’s closing price on Tuesday.
Smithfield is also one of the world’s biggest pork processors and the move will help the company break into the Chinese market. It’s the third-largest market in the world for U.S. pork.
Reuters reports that Shuanghui will keep Smithfield’s operations, staff and management.
Shuanghui is the parent company of Henan Shuanghui Investment & Development Company. It was embroiled in a scandal back in 2011 when it was found that chemicals harmful to humans were fed to livestock.
Food poisoning and fake products have also become a major concern in China. In March, the public was angered by the discovery of 16,000 rotting pigs in one of Shanghai’s main water sources. Just this month, a crime ring was discovered trying to sell $1 million in rat meat as mutton.