Under the deal, announced late on Monday, Dabeinong will take full ownership of three of the companies and a 51% stake in five others.
Shares of Zhengbang jumped 3% while Dabeinong rose 1.8% on Tuesday, following the announcement of the deal.
Zhengbang, China's No. 2 hog producer, is short of cash after a major expansion during 2020 left it vulnerable to last year's dramatic plunge in hog prices.
In January, the company said it expected to report annual losses of almost 20 billion yuan for 2021, the worst performance among all listed peers.
Last month it announced an agreement with a local government-backed infrastructure group to fund some of its feed purchases.
The planned sale includes full ownership of Deyang Zhengbang, Danling Zhengbang and Chongqing Guanglian, as well as majority stakes in five Zhengbang subsidiaries based in the southwestern provinces of Yunnan and Guizhou.
The eight companies had combined net profits of more than 200 million yuan in the first three quarters of 2021, according to Reuters calculations based on Zhengbang's stock exchange statement.
The deal was made to strengthen the company's competitiveness in the feed industry and improve its feed sector layout in the southwestern region, Dabeinong said in a filing on Monday.
Dabeinong is one of China's top feed producers and also raises pigs and sells seed.
The company told investors this month it wanted to have a 10% share of the feed market in the near term and 20% in the mid-to-long term.
It forecast a loss of between 230 million yuan and 450 million yuan for 2021.
($1 = 6.3066 Chinese yuan)
(Reporting by Dominique Patton, Editing by Louise Heavens and Sherry Jacob-Phillips)
