Smithfield casts vote on merger
9/6/2013, 4:19 p.m.
By Jordan Crawford
Many a concern has been posed regarding the world’s largest pork producer, Smithfield Foods, Inc. being headed by China. Well, the $4.7 billion purchase of Smithfield Foods by Chinese meat processor Shuanghui International Holdings could move a step closer to completion when shareholders vote on the merger next month.
Smithfield Foods recently said that it will hold a shareholders’ meeting on Sept. 24 to vote on the transaction with Shuanghui that was announced by the two companies in late May. Smithfield said its board of directors recommended that shareholders vote in favor of the deal.
The companies have said they expect the transaction to close later this year.
Smithfield Foods, founded in 1936 and based in Virginia, sells packaged products under its own name and other popular brands, including Farmland, Armour and Cook’s. The company employs more than 46,000 people in 25 states and four countries.
The purchase of Smithfield Foods for $34 a share would be the largest takeover of a U.S. company by a Chinese firm. In addition to a shareholder vote, the deal must receive antitrust clearance and be approved by the secretive U.S. Committee on Foreign Investment (CFIUS), which reviews such transactions for their impact on national security.
CFIUS initially conducted a 30-day review into the merger, but chose in July to extend the process for an additional 45 days. The government panel, which has the option to extend a review, did not say why the extra time was necessary.
According to government officials, Washington lawmakers have expressed concern the takeover would squeeze the U.S. pork supply by shipping more of the meat to China and leave the U.S. susceptible to food safety concerns that have plagued Chinese companies, including Shuanghui.
Smithfield has vigorously lobbied in favor of the deal and told skeptical lawmakers that jobs will be protected and the safety of the U.S. food supply would be maintained. The firm also said the deal would benefit U.S. pork farmers by giving them greater access to meat-hungry consumers in China, South Korea, Japan and other Asian countries.
“This is a wonderful opportunity for the U.S. to do what it does best, produce agriculture products and ship them around the world,” said CEO Larry Pope. “This is an opportunity for U.S. pork producers to grow.”