China needs pork, a lot of it. And so Shuanghui International's (Shineway Foods, in English) $4.7 billion bid to acquire Smithfield Foods, the world's largest processor and producer of pork, makes perfect sense. But because the deal involves a Chinese company, there are concerns being expressed in some corners that the deal may not be a positive from the perspective of American interests.
To take a step back, the acquisition represents the largest takeover of a U.S. company by a Chinese business. If the deal is approved, it most certainly means that more of what Smithfield produces will be exported to China.
Smithfield Foods' CEO C. Larry Pope is extolling the virtues of the deal as a means to open more markets to the company.
"We do not anticipate any changes in how we do business operationally in the United States and throughout the world," said Mr. Pope, in a statement. "We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui."
Mr. Pope and four other top executives at Smithfield stand to make more than $85 million in the deal.
- Shuanghui International and Smithfield Foods Agree to Strategic Combination, Creating a Leading Global Pork Enterprise - Smithfield Foods, Inc./ Shuanghui International Holdings Limited
- Smithfield Foods Acquisition by Chinese Meat Giant Hits A Lot of Hot Buttons - brandchannel
- Smithfield Bosses to Get $85.4 Million From Chinese Deal - Bloomberg News
- China Makes Biggest U.S. Play - The Wall Street Journal (sub. required)
- China's Pork Deal May Hinge on the Risk for an Uproar - The New York Times (tiered sub.)