Smithfield Foods (SFD) has agreed to be purchased by privately-held Hong Kong meat processor Shuanghui International for $4.8 billion in a move that expands its suite of meat products to the fast growing China market. 

The bid values Smithfield at $34 a share, and represents a premium of 31% to its closing price on Tuesday, the last day of trade before talks of the negotiations were made public. Including debt, the deal is valued at $7.1 billion.  

Shares of Virginia-based Smithfield, known for its assortment of fresh and packaged meats, climbed 26.5% in premarket trade to $32.83.

“It will be business as usual -- only better -- at Smithfield,” the company’s chief executive, C. Larry Pope, said in a statement. “We do not anticipate any changes in how we do business operationally in the United States and throughout the world.”

The company earlier this year had to fend off shareholder calls for Smithfield to split in two, with a focus on its more lucrative packaged meats business. Pope had long said selling its farms would be a mistake.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies and marks one of the biggest deals so far this year in China, Shuanghui will acquire all of Smithfield’s outstanding shares in cash.  

The deal gives Shuanghui a holding in the coveted American meat market saturated with competitors like Tyson Foods (TSN) and Hormel Foods (HRL), while allowing Smithfield to widen its footprint in China.

“Shuanghui will gain access to high-quality, competitively-priced and safe U.S. products,” the holding company’s chairman, Wan Long, said. “We will be able to meet the growing demand in China for pork … while continuing to serve markets in the United States and around the world.”

Shuanghui said it remains committed to working with American farmers and won’t close any of Smithfield’s facilities and locations.

The deal brings Smithfield private, meaning its shares will cease to trade on the public markets upon the transaction’s finalization. The U.S. company will then become a wholly-owned independent subsidiary of Shuanghui, with Pope continuing to serve as its CEO and the rest of its management team staying intact.

Shuanghui has received committed financing from Morgan Stanley (MS) and a syndicate of banks and will also use a combination of cash and rollover of existing Smithfield debt to fund the deal.

The acquisition, which remains subject to regulatory and Smithfield shareholder approval as well as other customary closing conditions, is slated to close in the second half of 2013.

Smithfield in March topped Wall Street expectations on improved margins and volumes in its packaged meat business but warned of an expected rise in hog prices. It is expected to report quarterly earnings on June 13.

Follow Jennifer Booton on Twitter at @Jbooton