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Smithfield to be sold to Chinese company

Shuanghui International of China agreed Wednesday to buy the US meat processor Smithfield Foods for about $4.7 billion, in one of the biggest moves to date by a Chinese company into the United States.

Under terms of the deal, Shuanghui, the largest pork processor in China, will pay $34 a share for Smithfield — 31 percent above the company’s closing share price on Tuesday.

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The deal is meant to give Smithfield, one of the world’s biggest pork producers, entry into China. Smithfield has looked for ways to export its meat to the country, one of the biggest markets for pork, as growth in other markets has slowed.

But it will probably draw close government scrutiny over Chinese food standards, especially amid a number of incidents like a recent scare over bird flu. Though Smithfield has argued that the deal is meant to sell American pork outside of the country and not import Chinese products, regulators are likely to ensure that the company does not lower its quality standards.

Shuanghui, also known as Shineway, is owned in part by an investment firm run by Goldman Sachs. It has around $1.6 billion in assets and factories across China, as well as operations in other countries like Japan and Korea.

The company is the parent of Henan Shuanghui Investment & Development Co., which has been listed on the Shenzhen Stock Exchange since the late 1990s.

In 2011, Shuanghui was at the center of a meat scandal after some of its farms were found to have fed a chemical harmful to humans to livestock.

The acquisition, which is subject to regulatory approval by the Committee on Foreign Investment in the United States, is expected to close in the second half of the year.

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