KKR, the private equity firm led by billionaires Henry Kravis and George Roberts, is buying a minority stake in China's largest chicken breeder and processor for about US$400 million.
KKR will buy 18 per cent of Fujian Sunner Development, the Chinese company said in a statement. It said the firms will form a partnership to expand Fujian Sunner's operations to provide meat that is safe to eat.
Food quality has become a major concern in China in recent years following a string of incidents in which products were found to be tainted.
Earlier this month, Heinz recalled some batches of flour in the country after one was found to contain high levels of lead. Last month, a recall of meat from a Shanghai unit of OSI, a US company, prompted McDonald's to pull some items from its restaurants in China.
Fujian Sunner said it aims to ensure quality by controlling all stages of production, from farming to processing.
"Vertically integrated chicken farming is a key solution to the food safety threats facing China's animal protein sector," Julian Wolhardt, an executive at New York-based KKR, said in the statement.
Demand for protein is booming in China as its middle class expands. The country accounts for 15 per cent of global demand for chicken, and most of that meat comes from small farmers and processors.
Large-scale producers make up 30 per cent of China's chicken supply, compared with 95 per cent in the US, according to Fujian Sunner.
Rising consumption of meat and the desire for better food standards are attracting other foreign companies to China, such as Tyson Foods, the biggest US meat company, which is investing in chicken houses and processing plants.
The spread of bird flu in China in the past year has reinforced the need for the kind of biosecurity measures Tyson uses at its operations, the company's chief executive, Donnie Smith, said last month.
KKR manages a US$6 billion fund investing in Asia, the largest private equity fund dedicated to the continent.
Earlier this year, KKR invested in Cofco Meat Investment, a hog processing company in China.