China Pigs Out, Plans to Buy US Pork Company for $4.7B
China's Shuanghui International has agreed to purchase Virginia-based Smithfield Food in the largest takeover of a US company by a Chinese rival.
Shuanghui's takeover will be "closely monitored" by the US on account of numerous Chinese food scandals. "In 2011, China's state broadcaster CCTV revealed that Shuanghui's pork products contained the banned chemical clenbuterol, which makes the meat leaner." In 2008, "six infants died and about 300,000 fell ill from tainted milk powder. It was later found to have contained melamine, an industrial chemical."
Smithfield owns the brands Farmland, Armour and Healthy Ones. Smithfield CEO Larry Pope said of the deal "This is a great transaction for all Smithfield stakeholders, as well as for American farmers and US agriculture."
Shares of Smithfield closed at $33.35 yesterday, rising more that 28%.