China’s Coming for our Pork!

China Town Pork FlossChina Town pork floss (cc photo by Peter & Laila)

Tuesday brought news that China’s largest pork producer – Shuanghui International Holdings – is purchasing American pork producer Smithfield Foods Inc. for a staggering $4.72 billion, in order to provide for a nation that has become the largest consumer of meat over the last 30 years:

China’s Shuanghui International plans to buy Smithfield Foods Inc for $4.7 billion to feed a growing Chinese appetite for U.S. pork, but the proposed takeover of the world’s No. 1 producer has stirred concern in the United States.

The transaction, announced on Wednesday, would rank as the largest Chinese takeover of a U.S. company, with an enterprise value of $7.1 billion, including debt assumption.

As it stands. the deal is the biggest Chinese play for a U.S. company since CNOOC Ltd offered to buy Unocal for about $18 billion in 2005. The state-controlled energy company later withdrew that bid under U.S. political pressure.

Like similar foreign transactions, the Smithfield deal will face the scrutiny of the Committee on Foreign Investment in the United States, or CFIUS, a government panel that assesses national security risks.

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