Chinese firm seeks to buy Smithfield pork producer

China’s Shuanghui International plans to buy Smithfield Foods Inc for $4.7 billion to feed a growing Chinese appetite for U.S. pork, but the proposed takeover of the world’s No. 1 producer has stirred concern in the United States.

The transaction, announced on Wednesday, would rank as the largest Chinese takeover of a U.S. company, with an enterprise value of $7.1 billion, including debt assumption.

As it stands, the deal is the biggest Chinese play for a U.S. company since CNOOC Ltd. offered to buy Unocal for about $18 billion in 2005. The state-controlled energy company later withdrew that bid under U.S. political pressure.

Like similar foreign transactions, the Smithfield deal will face the scrutiny of the Committee on Foreign Investment in the United States, or CFIUS, a government panel that assesses national security risks.

And at least one member of Congress said the deal raised alarms about food safety, noting Shuanghui was forced to recall tainted pork in the past.

“I have deep doubts about whether this merger best serves American consumers and urge federal regulators to put their concerns first,” U.S. Rep. Rose DeLauro, a Democrat from Connecticut, said in a statement.

Shuanghui is already majority shareholder of Henan Shuanghui Investment & Development Co., China’s largest meat processor. It would join forces with a company that has a worldwide herd of 1.09 million sows, according to industry data compiled by Successful Farming magazine.

The CFIUS review process comes at a time of sour relations between the United States and China over cross-border deals. In the latest irritant, a $20.1 billion bid by Japan’s SoftBank Corp to control U.S. wireless carrier Sprint Nextel Corp has fanned fears of Chinese cyber attacks against the United States.

Shuanghui offered $34 a share for Smithfield, a 31 percent premium to its closing stock price on Tuesday. The Chinese company will assume $2.4 billion of Smithfield’s debt.

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