WASHINGTON DC, USA – A US Senate panel Wednesday, July 10, weighed the national security implications of the acquisition of a major US food producer by a Chinese company.
Shuanghui International Holdings Ltd, China’s biggest meat processor, agreed in May to acquire Smithfield Foods Inc, the world’s largest pork producer, in a $4.7-billion deal.
The deal requires regulatory and political approval, and some senators on Wednesday said the deal was not a good idea.
“We need to be having this conversation and evaluating what is in the best interests of American families and our American economy because the importance of our food supply and security and safety cannot be underestimated,” said Senator Deborah Stabenow of the Senate agriculture committee.
Smithfield chief Larry Pope said the deal would create jobs for local farmers.
“Americans are eating less pork than they were 15 years ago, so without the opportunity to grow outside of the US there is no opportunity for the US pork producer to expand,” he said.
Daniel Slane of the US Chamber of Commerce pointed out that the US does not have the same opportunity to buy foreign companies as foreign firms have in the United States.
He said he believed that China is using the deal to only increase its own production.
“The overriding principle in China is food security, and they do that through self-sufficiency,” he said.
Pope also assured senators that the company would maintain standards, amid concerns about Shuanghui’s track record.
In 2011, pork products from a Shuanghui affiliate were disclosed as containing the banned growth-promoting substance clenbuterol, triggering a wide recall in China.
If the deal goes through, Shuanghui would assume Smithfield’s debts in addition to the 4.7 billion dollar buyout, putting the total value of the deal at 7.1 billion dollars, and making it the largest foreign acquisition ever of a US firm.
The Senate committee does not have the final say in approving the deal, with that decision in the hands of the inter-agency Committee on Foreign Investment in the United States. – Rappler.com