Shuanghui International is planning a takeover of Smithfield Foods in what will be the biggest purchase of an American brand by a Chinese firm, the Washington Post reports.
The deal, a $4.7 billion purchase by Shuanghui, was announced on May 29 to the shock of many in the town of Smithfield – where the pork production company is headquartered.
Smithfield Mayor Carter Williams told the Daily Press, “I was very surprised. I knew nothing about it. I don’t think anyone in Smithfield knows anything about it.”
The deal will apparently leave US management intact.
“This is not selling out to the Chinese. This is Smithfield being part of a global organization,” Smithfield chief executive C Larry Pope said at a media briefing. “There will be no impact on how we do business in America and around the world. This is about America exporting.”
Neither Smithfield or Shuanghui has a clean track record in their practices.
Shuanghui was caught in a food scandal in 2011 when it sold pork with the illegal additive clenbuterol – a drug that can impact lung and heart function in people who have eaten the meat of animals given the drug, according to the US Food Safety and Inspection Service website.
The company subsequently apologized and dumped the meat in a landfill.
Smithfield has been criticized for the millions of gallons of waste from their factories that have contaminated rivers and creeks in North Carolina, as well as complaints from the Humane Society regarding the company’s handling of its animals.
The deal will be reviewed by the Committee on Foreign Investment in the United States, a government panel that evaluates potential national security risks.
[By Huizhong Wu // Image via Baidu]