Tyson Foods Inc. has signed a preliminary agreement to buy 60 percent of Xinchang Group, the fifth largest poultry producer in China.

The framework agreement was signed in June and is subject to further due diligence and government approvals, which could take several months to complete, company spokesperson Gary Mickelson confirmed to Meatingplace.com.

Based near Qingdao in Shangdong Province, Xinchang Group will have the capacity to process 125 million birds a year once its new plant opens in August. Last year, the vertically-integrated company's sales reached $289 million.

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