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U.S. unlikely to block Chinese purchase of Smithfield
The U.S. government should soon give the go-ahead for the largest ever Chinese acquisition of a U.S. company: a Chinese food group’s $4.7-billion (U.S.) deal to buy Smithfield Foods Inc., a person familiar with the matter told Reuters.
Government approval of the purchase of Smithfield by Shuanghui International Holdings would be a major step forward for the deal. But it still needs shareholder approval, and at least one substantial shareholder is looking for a higher price.
The bid, an effort to feed China’s growing appetite for pork, has stirred concern about food safety and other issues among some U.S. politicians and faced review by a committee of several government agencies overseen by the Treasury Department.
The source said approval is expected after the conclusion of a review of the proposed deal by the Committee on Foreign Investment in the United States (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security. The review was scheduled to conclude by Saturday.
But the source said the Smithfield case was not much different from the 2012 takeover of AMC Theaters by China’s Dalian Wanda Group for $2.6-billion, which was allowed to proceed when the CFIUS determined the deal posed no threat to national security.
“We have theatres in military bases. We have ham in military bases,” said the person, who was not authorized to speak publicly.
The Treasury Department, which oversees the work of the CFIUS committee, declined comment, saying by law, information filed with CFIUS may not be disclosed to the public.
Smithfield, the world’s biggest pork producer, declined to comment ahead of the panel’s decision.
Some lawmakers expressed concerns the deal could jeopardize U.S. food safety and raise pork prices for American consumers.