Smithfield to form new hog production company ahead of IPO

Smithfield Foods has inked a deal with VisionAg, an affiliate of North Carolina’s HD3 Farms, to start a new hog production business early next year as the meat producer gears up to go public, the company announced Friday.

Smithfield, a giant in packaged meats and pork products, will provide 28,000 sows to the new company, VisionAg Hog Production, a limited liability company licensed in Cary, North Carolina. VisionAg Hog Production will also own market hogs the sows produce, a number expected to reach 600,000 annually, and those animals will be produced for Smithfield’s fresh pork operations, according to the announcement.

Smithfield will provide feed, transportation and other services to the new company, and will own a minority interest. Financial terms were not disclosed Friday.

HD3 Farms, based in Elizabethtown, North Carolina, has worked as a contractor with Smithfield for more than two decades and has 250,000 wean-to-finish and finish spaces for hogs on farms in several counties in eastern North Carolina.

The largest pork producer in the United States, Smithfield Foods has about 35,000 employees nationwide and is owned by China’s WH Group, based in Hong Kong. Earlier this year the parent company announced the proposed spinoff and initial public offering of Smithfield Foods on a U.S. stock exchange. WH Group shareholders voted Dec. 6 to approve spinning off Smithfield Foods.

In September, Smithfield’s European operations were carved into an independent subsidiary now known as Morliny Foods, part of a streamlining effort before going public.

Smithfield Foods also said it would transfer some of its hog farming operations to a venture controlled by Murphy Family Ventures in North Carolina, Bloomberg reported earlier in December.

According to an announcement in November, Smithfield’s IPO will take place in early 2025, and WH Group plans to offer up to 20% of Smithfield’s stock shares, reducing the parent company’s ownership to 80%. Smithfield recorded a net asset value of $5.38 billion as of Sept. 30, and its New York share offering is expected to be valued at $5.4 billion.