Chinese takeover of Smithfield Foods gets US security approval

Chinese takeover of Smithfield Foods gets US security approval

The two companies announced the deal on May 29, with Shuanghui – which controls one of China’s largest meat processors – offering $ 4.5bn in cash for the American company, whose name has long been closely identified with US pork products.

Adding the debt Shuanghui will take on, the deal’s overall value went to $ 7.1bn.

But some politicians expressed concerns about the takeover of the company, especially given China’s huge demand for pork imports and rising prices in the US market, as well as concerns over whether the Chinese company would adhere to adequate sanitary standards.

Shuanghui has insisted it will keep the company’s US operations and brands, and would uphold safety standards.

“This transaction will create a leading global animal protein enterprise,” Shuanghui chief executive Zhijun Yang said.

“Shuanghui International and Smithfield have a long and consistent track record of providing customers around the world with high-quality food, and we look forward to moving ahead together as one company.”

The two companies have set September 24 for a special Smithfield shareholders meeting to ratify the deal.

But earlier this week Starboard, which holds 5.7pc of the company, said it would vote in opposition, and urged others to do so as well.

Starboard said the company is worth $ 9bn to $ 10.8bn if broken up, and that it had identified potential buyers of various units.

But until now no other formal offers have been announced.

(Edited by Andrew Trotman)

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