(CN) – Shanghui International, of China, will buy Smithfield Foods for $4.7 billion, the company said today, another major move into the U.S. economy.
In discussing the deal, analysts cited the Chinese love of pork – China is the world’s biggest consumer of the meat, and third-largest buyer of U.S. pork.
The deal will be reviewed by the U.S. Committee on Foreign Investment.
Like virtually all corporate buyouts of this size, it also will probably have to face shareholder class action lawsuits, though Shanghui offered $34 a share, 31 percent over Smithfield’s Tuesday closing price. Shanghui also will assume $2.4 billion in Smithfield’s debt.
China has faced several meat scandals recently, including 16,000 dead pigs found floating in a river that provides Shanghai’s drinking water, and the busting of a ring that sold rat meat and other small-animal meat for more than $1 million, as mutton.
Shares of Smithfield jumped more than 25 percent on the news this morning, up $6.57 to $32.53 just before 10:30 a.m.
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