(Yicai) June 17 -- Shares of Teamgene Technology surged by the daily limit after the major Chinese pig feed supplier announced plans to acquire six US-backed farms in eastern China’s Shandong province and a breeding technology firm, marking its expansion into the pig farming sector.

Teamgene’s stock [SHA: 603151] jumped 10 percent to close at CNY18.83 (USD2.60) in Shanghai today, representing an almost 90 percent increase so far this year. Trading had been suspended for nearly two weeks prior to the acquisition announcement.

The animal nutrition company will issue new shares and pay cash to Singapore-registered Riverstone Farm to acquire six pig farms in Shandong and an 80 percent stake in Pipestone Livestock Technology Consulting, a Shanghai-based subsidiary of US swine veterinary services provider Pipestone, the Zibo-based buyer said yesterday. Teamgene’s feed products are already popular in Shandong and northeastern China.

The issue price for the new shares is set at CNY13.33 apiece -- a 22 percent discount to the closing price on June 4, the day before the trading halt. The final transaction amount will be determined following asset audits and valuations of the target companies.

Riverstone Farm is an investment holding firm affiliated with American agribusiness giant Cargill and hog breeder Pipestone System. Its shareholders include two investment funds under Proterra Investment Partners, a Cargill-affiliated asset manager, along with Pipestone as minority shareholder. The six farms apply Pipestone’s advanced breeding practices, with over 80 percent of their equipment imported from the United States. Strict management protocols are in place to ensure effective disease prevention and control, according to Teamgene.

The acquisition expands Teamgene’s core business beyond feed research, development, production, and sales into downstream pig breeding operations, creating an integrated value chain that spans feed processing, hog breeding, and sales, the company said. The move is expected to diversify revenue sources, boost profitability, and reduce operational risk.

Following the transaction, Riverstone Farm will also become a shareholder of Teamgene, holding more than 5 percent of its equity. However, the Chinese firm’s controlling shareholder will remain unchanged.

Editor: Emmi Laine