Smithfield will IPO in Hong Kong

World’s largest hog producer aims to earn US$4 billion.

China's Shuanghui International Holdings, which is buying U.S. pork producer Smithfield Foods, Inc. for US$4.7 billion, plans to list the combined company in Hong Kong after completing the takeover. Shuanghui could also use the proceeds to repay some of the debt.

Sources said a Hong Kong IPO would allow the merged firms to trade in a market that would place a higher valuation on the stock than the U.S. or other exchanges. Shuanghui's main publicly traded subsidiary is listed in Shenzhen, a smaller stock market compared to Hong Kong.

Bank of China and Morgan Stanley have combined to provide US$7 billion of loans to finance Shuanghui International's record deal to buy the U.S. pork producer.

The Smithfield deal has yet to close, however, and plans on what happens after the takeover would only be finalized upon the completion of the deal.