(Bloomberg) -- Smithfield Foods Inc. will transfer part of its hog farming operations to a new venture controlled by Murphy Family Ventures Llc. as the maker of Farmland bacon and Farmer John sausages seeks to further streamline operations ahead of a planned share offering.
The Murphy-controlled business will assume ownership of 150,000 sows currently owned by Smithfield and supply about 3.2 million hogs annually for the US pork producer, the Virginia-based company said in a statement. Terms of the deal weren’t disclosed.
The transaction marks the return of the Murphy family as an independent hog producer more than two decades after it sold to Smithfield the second largest US operation of the kind at the time. The move also comes at a time when Smithfield, which is now controlled by Hong Kong-based WH Group Ltd. is planning a New York share offering that is expected to value it at at least $5.4 billion.
Smithfield has over the past years shut hog farm operations, including in Arizona and California, as the cost of raising hogs increased relatively to pork prices. The company said the deal with the Murphy family adds to its streamlining push into value-added fresh pork and packaged meats.
Members of the Murphy family were among the largest investors in Smithfield in the early 2000s. Smithfield was sold to WH Group in 2013.
The transaction is expected to be completed by the end of the year.
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