Wednesday, May 29, 2013

Chinese meatpacker in line to buy Smithfield

"Chinese meat producer Shuanghui International Holdings Ltd. agreed to acquire Smithfield Foods Inc. for about $4.7 billion, striking what would be the largest takeover of a U.S. company by a Chinese buyer — should it get past what is likely to be heavy regulatory scrutiny," Dana Cimilluca reports for The Wall Street Journal.

There may be other bidders than the Chinese firm, which is also known as Shineway. Smithfield Chairman Joseph Luter told Cimilluca, "Lots of people love us. I'll leave it at that."

The United Food and Commercial Workers, which represents 16,000 of Smithfield's 46,000 workers, many of them rural, said it favored the deal because it would leave current management and collective-bargaining agreements in place.

Cimilluca notes, "There is no guarantee that political concerns, fears surrounding Chinese food safety or other factors won't scuttle the deal before it is consummated. The companies said they would submit the deal voluntarily for review by the Committee on Foreign Investment in the United States." (Read more)

The deal comes after a large Smithfield shareholder, Continental Grain Co., had urged the company to split itself up, notes Meghan Grebner of Brownfield.

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