US meat processor Smithfield Foods has accepted a US$7.1bn takeover bid from China’s biggest pork producer, Shuanghui International.

Under the terms of the deal, Shuanghui will acquire all of the outstanding shares of Smithfield for $34 per share in cash. The purchase price represents a premium of around 31% over Smithfield’s closing stock price on 28 May.

The transaction will be financed through a combination of cash provided by Shuanghui, rollover of existing Smithfield debt, as well as financing committed by Morgan Stanley and a syndicate of banks.

Upon closing of the transaction, Smithfield will be a wholly-owned independent subsidiary of Shuanghui International Holdings, operating as Smithfield Foods. CEO Larry Pope will continue in his role, as will the management teams and workforces of Smithfield’s operating companies.

Smithfield said there will be no closures at any of its facilities and locations.

“This is a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture,” said Pope. “We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui.”

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Smithfield’s largest shareholder, agribusiness Continental Grain, has in recent months called on the company’s management to split the business in three. Last month, Pope labelled the idea “inherently flawed”.

Click here for coverage of Smithfield Foods’ conference call to discuss the deal with Wall Street analysts.