In an effort to defuse American concern, Shuanghui took the unusual step for a food company of announcing in advance it would submit the proposed acquisition for a U.S. government security review.
The Chinese acquisition of the biggest U.S. pork processor “is a bit concerning,” said U.S. Sen. Chuck Grassley in a statement last week. He said regulators should look closely at the deal.
Wan, dubbed “China's Chief Butcher” by his country's press, stressed that selling pork loin and sausage is very different from the oil and high-tech companies that have run afoul of U.S. security objections.
“Ours is a food industry. It shouldn't be subject to controls,” he said, sitting at a desk decorated with porcelain pig figurines. “I believe this will go through without a hitch.”
Most Chinese acquisitions in the United States are completed uneventfully, but the few that have failed — and the disclosures required to obtain regulatory approval — have made companies skittish.
The Chinese state press frequently invokes the memory of state-owned oil company CNOOC Ltd.'s failed attempt in 2005 to buy American oil and gas producer Unocal Corp. CNOOC offered more money than rival Chevron Corp. and promised to retain Unocal's workforce but withdrew after some American lawmakers objected the deal might jeopardize national security.
Shuanghui has 70,000 employees and annual sales in excess of $8 billion.
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.