RICHMOND, Va. (AP) — The head of Smithfield Foods Inc. is trying to ease concerns that the proposed takeover of the world's largest pork producer by a Chinese company would pose risks to the U.S. food supply.
CEO Larry Pope testified Wednesday at a Senate Agriculture Committee hearing on the pending deal struck in May with Shuanghui International, China's largest meat producer. The plan, which is subject to federal and shareholder approvals, is expected to close later this year. It would be the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion including debt.
Committee Chairwoman Debbie Stabenow, D-Mich., said the proposed purchase of the Smithfield, Va.-based company raises many questions, including the impact on food safety and security. She also said the precedent-setting transaction prompts reservations about the government review process of foreign acquisitions of U.S. companies.
"Smithfield might be the first acquisition of a major food and agricultural company, but I doubt it will be the last," said Stabenow.
She asked the Treasury Department to include both the U.S. Department of Agriculture and the Food and Drug Administration in the government's review of the sale.
"In the short-term, I know this deal looks good for our producers ... One pork company alone might not be enough to affect our national security, but it's our job to be thinking about the big picture and the long-term for American food security and economic security," Stabenow added.
The proposed deal comes at a time when China has had serious food safety concerns, some of which have included Smithfield's suitor.
Pope reiterated that the takeover isn't about importing Chinese pork into the U.S. and is instead a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.
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