(Adds COFCO comments, background)
NEW YORK, June 30 U.S. pork producer Smithfield
Foods Inc SFD.N said on Monday that COFCO Limited, China's
largest agricultural trading and processing company, will buy a
near-5-percent stake in the company.
Smithfield said COFCO will purchase 7 million shares, or 4.95
percent, of Smithfield's common stock.
The purchase price will be equal to the closing price of its
common stock on the day its offering of $350 million convertible
senior notes due 2013 is priced, said the company.
A spokeswoman with COFCO Ltd in Beijing said the investment,
the company's first in a U.S firm, will benefit COFCO's expansion
in the pork industry in China.
"So far we have no intention to raise the stake," she said.
"We hope we will learn from Smithfield its technology and
management advantages in the production chain from livestock
breeding to quarantine to consumer table," said the spokeswoman,
adding the move was not aiming at increasing pork imports.
Consumption in China, the world's largest pork producer and
consumer, has been growing more than 10 percent annually in
China's pork prices hit a record high level after outbreaks
of blue ear disease in 2006 had helped reduce the pig population
and drive the country's inflation to a decade-high level.
Domestic pork prices were likely to remain high for the rest
of the year after the earthquake in the country's largest pork
producing province of Sichuan in May killed more than 3 million
pigs, according to estimates from industry officials.
(Reporting by Nicole Maestri in New York and Niu Shuping in
Beijing; Editing by Keiron Henderson)