Smithfield Foods, one of America’s largest pork producers has been sold to one of China’s largest meat processors, Shuanghui International for US $4.7 b.
The deal, which is said to be the largest takeover of an American company by a Chinese firm, has raised concerns surrounding food safety issues and national security according to the New York Times.
Shuanghui International was under fire two years ago when traces of a banned additive called clenbuterol was allegedly found in its Shineway brand of pork, resulting in a costly recall from store shelves.
Smithfield has also received their fair share of bad press. During the 2009 flu pandemic, a five year old boy living near a Smithfield subsidiary in Mexico contracted the deadly H1N1 swine flu virus. It was later confirmed that over 600 residents living near the plant located in La Gloria, Veracruz were infected with a mysterious respiratory illness.
The deal has also drawn the attention of the American government regulators who have raised concerns over national security. It has been reported that both Shuanghui and Smithfield plan to refer the deal to a US government department that oversees foreign investment.
Scandals aside, Smithfield believes that the deal is will benefit both itself and American farmers by expanding its reach to the American market who have a growing appetite for meat.
“This transaction will allow us to access Asia in a big way,” said C. Larry Pope, Smithfield’s chief executive. “This is an export deal, and they are very interested in exporting products out of the US.”