LUOHE, China — At an age when most Chinese executives are long retired, the country's top hog butcher is taking on a daunting new job persuading Americans to allow him to complete China's biggest takeover of a U.S. company.
Shuanghui International's $4.7 billion bid for Smithfield Foods Ltd. has the endorsement of the American company's board. But facing anxiety over food safety scandals in China and complaints about Chinese cyber spying, 72-year-old chairman Wan Long has launched a charm offensive to reassure Americans they have nothing to fear and possibly much to gain from the tie-up.
“We want to be vigilant that Smithfield's brand doesn't change, its team doesn't change, its production sites don't change, it doesn't cut jobs,” said Wan in an interview at Shuanghui's 15-story headquarters in this eastern Chinese city.
As for reassuring American consumers about quality, Smithfield “already has a very good food safety control system,” Wan said. “With our support, they will do better in quality and safety controls.”
Wan's strategy of talking to reporters and inviting them to visit Shuanghui's packing plants is an unusual approach in China, where companies are secretive and corporate bosses rarely speak in public.
As Chinese companies expand abroad, those habits have hurt some when the United States, Australia and other countries balked at acquisitions by unfamiliar buyers in oil, mining and technology industries. Shuanghui's approach appears to reflect an understanding that success requires not just money but winning over politicians and consumers.
“There are plenty of examples of Chinese companies that made the largest offer but were not ultimately accepted,” said Kenneth Jarrett, an expert on government relations for consulting firm APCO Worldwide in Shanghai. “For any Chinese company looking at any investment in the United States, they want to be aware of the political dynamic.”
OKLAHOMA OPERATIONS INCLUDED
The proposed Smithfield Foods sale includes its subsidiary pork producer Murphy-Brown LLC, which employs about 450 people in Oklahoma. Murphy-Brown has operations in Beaver, Laverne and Texhoma. The company has more than 73,000 sows in Oklahoma and a feed mill with a capacity of 11,500 tons per week.