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AgFeed to Buy US Hog Production Firm for $16M

by 5m Editor
21 July 2010, at 11:14am

US - AgFeed Industries Inc. yesterday said it plans acquire Ames, Iowa-based hog production company M2P2 LLC for an estimated $16 million as AgFeed bolsters its Chinese operations. The deal is expected to be finalised later this summer.

AgFeed, a US company with primary operations and one of the largest commercial hog producers in China, said it expects M2P2, already a joint venture partner in AgFeed International Protein Technology Corp, to bring science-based management practices and technologies to China as the country tries to industrialize and commercialize its hog production industry. According to Meatingplace, M2P2 also will build new western-style farms and two slaughterhouses in the Nanning/Dahua and Nanchung/Xinyu areas.

“M2P2’s dedication to continuous performance improvements in the hog production industry has resulted in impressive performance metrics in sow productivity and feed conversions,“ AgFeed Chairman Songyan Li said in a news release. “For both AgFeed and M2P2 this is a transformational opportunity to position our combined businesses to achieve superior growth and earnings on an international basis as we respond to global market opportunities.

AgFeed credits M2P2 as having excelled in innovation, productivity and efficiency in pork production. With sow operations in Colorado, Oklahoma and North Carolina, and finishing operations in Iowa, M2P2 will produce some 1.3 million pigs per year.

AgFeed expects to pay a total of $16 million, of which 80 per cent will be paid in cash and 20 percent in the company’s common stock. The deal is subject to approvals.

Upon completion of the transaction, John Stadler, chairman of M2P2 would join AgFeed’s board of directors.