Heralding what could be the largest-ever Chinese takeover of an American firm, US regulators on September 6 approved Shuanghui International Holdings’ $4.7 billion bid for American pork producer Smithfield Foods Inc. The deal was initially announced in May. But before shareholders could vote on the transaction, it had to clear a national security review by the Committee on Foreign Investment in the United States (CFIUS).
Shuanghui and Smithfield spokespersons have said repeatedly that the deal is a “win-win” for the US and China, where the appetite for meat—and pork in particular—is ballooning. In written testimony, Smithfield CEO Larry Pope said, “This transaction is about exporting high-quality meat products from the US to China to meet the growing global demand for pork and increase global food safety standards.”
But some US politicians are not so sure. In a contentious hearing on July 9, senators—including Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.)—raised questions about the deal’s ramifications for the US food supply and food safety.
“Economic security is part of our national security, and it should be considered when our government reviews foreign investment into the United States,” said Stabenow in her opening statement.
After the hearing, the Shuanghui-Smithfield deal went through a full 75-day investigation under CFIUS, as opposed to the standard 30-day review. Such full investigations now account for more than one-third of all CFIUS reviews, which examine the national security implications of foreign acquisitions, typically in fields like infrastructure, energy, telecommunications and defense. From 2009 – 2011, Chinese companies accounted for just 7 percent of all CFIUS reviews.
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US Regulators Approve $4.7 Billion Chinese Takeover of Smithfield Foods | China Business Review
Shuanghui and Smithfield spokespersons have said repeatedly that the deal is a “win-win” for the US and China, where the appetite for meat—and pork in particular—is ballooning. In written testimony, Smithfield CEO Larry Pope said, “This transaction is about exporting high-quality meat products from the US to China to meet the growing global demand for pork and increase global food safety standards.”
But some US politicians are not so sure. In a contentious hearing on July 9, senators—including Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.)—raised questions about the deal’s ramifications for the US food supply and food safety.
“Economic security is part of our national security, and it should be considered when our government reviews foreign investment into the United States,” said Stabenow in her opening statement.
After the hearing, the Shuanghui-Smithfield deal went through a full 75-day investigation under CFIUS, as opposed to the standard 30-day review. Such full investigations now account for more than one-third of all CFIUS reviews, which examine the national security implications of foreign acquisitions, typically in fields like infrastructure, energy, telecommunications and defense. From 2009 – 2011, Chinese companies accounted for just 7 percent of all CFIUS reviews.
more
US Regulators Approve $4.7 Billion Chinese Takeover of Smithfield Foods | China Business Review