Smithfield Foods and Premium Standard Farms (PSF), the two largest U.S. pork producers, have announced a merger, with Smithfield acquiring all PSF outstanding shares. The agreement has a total transaction value of about $810 million, including the assumption of $117 million of PSF net debt, Smithfield says. The deal, which should close early next year, will give Smithfield nearly 18% of the U.S. hog-production market.

Smithfield, with annual sales of $11 billion, is the leading U.S. processor and marketer of fresh pork and processed meats, and the largest producer of hogs. Meanwhile, PSF is one of the largest vertically integrated U.S. providers of pork products and the nation's second-largest pork producer and sixth-largest pork processor.