SINGAPORE/HONG KONG (Reuters) - China's Shuanghui International Holdings, which has agreed to buy U.S. pork producer Smithfield Foods Inc. for $4.7 billion, plans to list the combined company in Hong Kong after completing the takeover, people with knowledge of the matter told Reuters.
A Hong Kong IPO, valued at around $4 billion, would allow the merged group to trade in a market that would place a higher valuation on the stock than the U.S. or other exchanges, the sources said.
Hong Kong is a far bigger and more international stock market than Shenzhen, the Chinese exchange where Shuanghui's main publicly traded subsidiary is listed. A Hong Kong listing would also offer an ideal exit route for Shuanghui's private equity investors when they decide to sell their holdings, according to the people familiar with the matter.
The Smithfield deal has yet to close, the sources cautioned, and plans on what happens after the takeover would only be finalized upon the completion of the deal.
Hong Kong stock exchange rules require one year of ownership before a merged entity can list.
Shuanghui could not immediately be reached for comment.
(Reporting by Saeed Azhar and Stephen Aldred; Additional reporting by Anshuman Daga in SINGAPORE, Grace Li, Matt Miller and Xinqui Su in HONG KONG; Editing by Michael Flaherty and Alex Richardson)
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