Smithfield Foods, the world’s largest pork producer, is set to be acquired by China’s biggest meat processor in a $7 billion deal.

Shuanghui International – the majority shareholder of processor Henan Shuanghui Investment and Development Co – has offered Smithfield shareholders $34 a share, amounting to a purchase price of $7.1 billion.

The deal would create a company with an unmatched set of assets, products and geographic reach, said Wan Long, Shuanghui chairman. “Smithfield is a leader in our industry and together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States.”

Smithfield would become a wholly-owned subsidiary of Shuanghui and all its common stock would cease to be traded. However, the company would retain separate operations, staff and management after the deal.

Smithfield looked forward to accelerating a global expansion strategy as part of Shuanghui, said Larry Pope, Smithfield president and CEO. “It will be business as usual – only better – at Smithfield.” Pope will stay in his role. 

The deal has been unanimously agreed by the board of directors of each company but must still be cleared by Smithfield’s shareholders, and competition authorities. It is expected to be cleared in the second half of this year.