China’s Shuanghui International to buy Smithfield Foods for $4.7B
A pig at a pig farm in Lishu County, Jilin Province in northeast China, January 17, 2008. Pigs in the Midwest are having a tougher time, thanks to a mysterious exploding foam on some farms.
China's Shuanghui International Holdings Ltd. has said it will buy Virginia-based Smithfield Foods Inc., the world’s largest pork producer, for $4.7 billion in cash.
The deal is the largest-ever Chinese acquisition of a US company.
Current and former US government officials and trade experts told the Wall Street Journal that they expect the the Committee on Foreign Investment in the US, or CFIUS, to approve the deal because meat production isn't considered central to national security.
Shuanghui executives said they will take Smithfield Foods private. They plan to keep Smithfield’s existing management team and honor collective bargaining agreements with the company’s workers, the Canadian Press reported.
"This transaction preserves the same old Smithfield, only with more opportunities and new markets and new frontiers," Smithfield CEO Larry Pope said in a conference call, according to the Canadian Press.
According to Reuters:
China, including Hong Kong, is the third-largest market for US pork behind Mexico and Japan.
Consumer concern over food safety and local pollution has increased Chinese demand for US meat over the past decade, Reuters reported.
More from GlobalPost: 16,000 dead pigs, 1,000 dead ducks found in China rivers
"This is not a strategy to import Chinese pork into the United States,” Pope said. “This is exporting America to the world."
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