US unlikely to block Chinese purchase of Smithfield
Shuanghui seen gaining approval for itsUS$4.7 billion purchase of Smithfield Foods
The US government should soon give the go-ahead for the largest ever Chinese acquisition of a US company: a Chinese food group’s US$4.7 billion deal to buy Smithfield Foods, a person familiar with the matter told Reuters.
Government approval of the purchase of Smithfield by Shuanghui International Holdings would be a major step forward for the deal. But it still needs shareholder approval, and at least one substantial shareholder is looking for a higher price.
The bid, an effort to feed China’s growing appetite for pork, has stirred concern about food safety and other issues among some US politicians and faced review by a committee of several government agencies overseen by the Treasury Department.
The source said approval is expected after the conclusion of a review of the proposed deal by the Committee on Foreign Investment in the United States (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security. The review was scheduled to conclude by Saturday.
But the source said the Smithfield case was not much different from the last year takeover of AMC Theaters by China’s Dalian Wanda Group for US$2.6 billion, which was allowed to proceed when the CFIUS determined the deal posed no threat to national security.
“We have theatres in military bases. We have ham in military bases,” said the person, who was not authorised to speak publicly.
