On June 30, 2008, Smithfield Foods announced an agreement with COFCO Limited for the sale of 7,000,000 shares, or 4.95 percent of Smithfield's common stock. COFCO, a company owned by the government of the People's Republic of China, is the largest national agricultural trading and processing company in China, and also has substantial business interests in food and beverage production, commercial and residential real estate, hotel operations, financial services and packaging.

"I am very pleased that COFCO has agreed to make this equity investment in Smithfield. We have been working closely together and this investment represents a significant step in cementing our relationship for the long term," stated C. Larry Pope, Smithfield's president and chief executive officer. "COFCO is a widely respected leader in China's food and agriculture industry," Mr. Pope said. "China is experiencing rapid growth in pork consumption and consumes more pork than the rest of the world combined. COFCO has introduced Smithfield to many opportunities in China and we look forward to continue working together."

Mr. Gaoning Ning, the chairman of COFCO, said, "Smithfield is the world's largest producer and processor of pork. We look forward to building on our existing commercial relationship and exploring growth opportunities in China's food industry together."
Smithfield has agreed to nominate Mr. Ning for election as a director at its 2008 annual shareholders' meeting. COFCO's investment in Smithfield is passive in nature and the purchase agreement contains standstill provisions.