Smithfield Foods, a leader in the U.S. food industry, will transfer ownership to Shuanghui International, a Chinese company, in the near future. However, the deal does not mean Chinese food making its way into Smithfield’s foods here in the U.S., according to the Smithfield CEO.
Smithfield CEO Larry Pope issued a prepared statement to the Senate Committee on Agriculture, Nutrition and Forestry that said the purchase of Smithfield by Shuanghui International “will not result in any U.S. imports of food from China.”
Lawmakers have been skeptic about the proposed deal because as usual, there are concerns that the takeover could affect American industry, intellectual property and even national security, which are concerns that are common with high profile mergers of U.S. companies with Chinese companies.
The world’s largest processor of pork, Smithfield Foods, is located in Virginia. It made the announcement in May that the company was being purchased by Shuanghui International for almost $5 billion. Currently, that deal is under regulatory review by the Committee for Foreign Investment in the U.S. (CFIUS). CFIUS reviews are used to assess national security effects resulting from a foreign company gaining ownership or control of an American company.
If the purchase is approved by CFIUS and other governmental agencies, it would be the largest acquisition of a U.S. company by a Chinese company. Pope said the merger will result in significant expansion of the Smithfield Foods market in China, but it would not affect how the company does business, he said in a prepared statement.
Shuanghui International has said Smithfield’s management will remain as it is now. They said they will also retain all plants, employees, and even the contracts that Smithfield currently has with more than 2,000 hog farmers situated all across the U.S.
U.S.-China Economic and Security Review Commission member Daniel Slane had prepared remarks expressing concerns about the proposed buyout of Smithfield Foods.
“Shuanghui is not investing in just any U.S. meat company,” he said. He then elaborated explaining it is the leader in the pork market, with 25 U.S. plants and more than 46,000 workers. Slane said the buyout would be giving the Chinese company access to technology and intellectual property that could result in placing the U.S. hog industry at a disadvantage.
He also noted that while pork imported from China is currently not permitted in the U.S., eventually Shuanghui could press for changes later to allow the importation of pork from China.
For comments and suggestions, leave a message in the comments section below. Like and Follow our Facebook page for more stories and to stay up-to-date with the latest happenings.