Smithfield Foods, Inc., Smithfield, Va., and Hong Kong-based Shuanghui International Holdings Ltd. entered into a definitive merger agreement that values Smithfield at approximately $7.1 billion, including the assumption of Smithfield's net debt.

Shuanghui International is the majority shareholder of Henan Shuanghui Investment & Development Co., which is China's largest meat processing enterprise and China's largest publicly traded meat products company as measured by market capitalization. Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Shuanghui will acquire all of the outstanding shares of Smithfield for $34 per share in cash. The purchase price represents a premium of approximately 31% over Smithfield's closing stock price on May 28, the last trading day prior to this announcement.