What is in this article?:
- Smithfield Foods sale clears U.S. hurdle
- Most feel sale will go through
• A U.S. regulatory group has approved the sale of Smithfield Foods to Chinese pork company.
• Concerns linger over Chinese takeover of Smithfield Foods.
SMITHFIELD FOODS subsidiary Murphy Brown has been instrumental in the increase in grain production in the Upper Southeast the past few years, with special emphasis on grain sorghum.
It appears the sale of Virginia-based Smithfield Foods, the largest pork production company in the world, to Shuanghui International, China’s largest pork company, is cleared to be finalized this fall.
The U.S. Committee on Foreign Investments in the U.S. (CFIUS) has approved the transaction.
Approval by the committee, which is charged with ensuring national security and critical infrastructure assets don’t fall into wrong hands, likely clears the way for the $4.8 billion buyout of one of America’s largest agricultural companies.
"Shuanghui International and Smithfield have a long and consistent track record of providing customers around the world with high-quality food, and we look forward to moving ahead together as one company,” Zhijun Yang, CEO of Shuanghui, said in a statement on Sept. 13.
After the announcement made late Friday, Smithfield Foods stock (SFD) sold about 1 percent higher on Monday. However, last week, Smithfield Foods disclosed a disappointing 36 percent loss in profits, citing reduced demand for U.S. pork products in foreign markets as cause for the decline.
Though the Smithfield deal cleared the CFIUS review, it must still be approved by Smithfield’s shareholders, who are scheduled to vote on Sept. 24.
One major stockholding group, Starboard Values, which owns 5.7 percent of the pork producer, disclosed recently that it would vote against the transaction. The hedge fund added that it had held talks with potential rival suitors who, it said, were willing to pay “substantially” more than Shuanghui’s $34-a-share cash bid.