Chicago: Shuanghui International Holdings Ltd., China’s biggest pork producer, agreed to acquire Smithfield Foods Inc. for about $4.72 billion to boost supplies for the nation that’s the biggest consumer of the meat.

“Shuanghui, parent of Henan Shuanghui Investment & Development Co., will pay $34 a share for the Smithfield, Virginia-based producer," both companies said on Wednesday in a statement. The price represents a 31% premium over Tuesday’s closing share price.

Smithfield shareholder Continental Grain Co. has been pushing for a change at the meat producer in the last few months. Smithfield should consider splitting into three businesses—one selling pork and packaged meats, another that runs hog farms, and a third based outside the US—because the unprofitable hog-raising unit hurts returns, Continental Grain said in a letter in March. The shareholder’s request came after Smithfield’s stock trailed Hormel Foods Corp. and Tyson Foods Inc.’s in the prior year.

“A deal is likely to face scrutiny by the Committee on Foreign Investment in the US," said two people familiar with the situation who asked not to be identified because the information is private.

The deal is valued at $7.1 billion including debt, according to both companies. That would make it the largest Chinese takeover of a US company, according to data compiled by Bloomberg. Bloomberg

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