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Smithfield Bought By Chinese Company Shuanghui

In the largest proposed takeover by a Chinese company, pork producer Shuanghui has proposed to buy Smithfield to meet rising Chinese demand.

A small pig stands behind a fence

Photo: thornypup (flickr)

As the Chinese middle class grows, so does the nation's appetite for animal-based protein.

Chinese company Shuanghui has offered to purchase American pork producer Smithfield for $4.7 billion. It is the largest proposed Chinese takeover of an American company in history.

Protein And Pork

Traditionally, the Chinese diet has consisted of rice and vegetables, but the growing Chinese middle class increasingly has an appetite for pork.

Chinese pork consumption is rising 1 to 2 percent a year, and annually makes up for about 80 pounds per capita, versus 59 pounds per capita in the United States.

Chinese farmers have been unable to keep up with demand, so Chinese pork sellers are looking elsewhere.

That’s where Smithfield comes in. The largest American producer of pork and pork products — including brands Eckrich and Armour — Smithfield makes up for about 23 percent of all pigs slaughtered for production.

Foreign Concern

Some are ill at ease over such a large acquisition by China.

There are concerns that Chinese companies are attempting to undermine American competitiveness, but more pressing are potential threats to national security.

The proposal must undergo the government panel Committee on Foreign Investment in the United States, or CFIUS, to determine whether or not it poses a threat to national security.

Americans are on high alert after recent allegations of cyber attacks by the Chinese on U.S. military.

However, proponents of the plan say only good can come from such a merger, which will open new markets to American farmers.

Health And Hogs

One good thing for the Chinese population is Smithfield’s health record.

Chinese consumers would have access to pork that undergoes stricter health standards.

However, American consumers are concerned about Chinese pork entering the market. Images of dead pigs floating in the Huangpu River in Shanghai are still fresh on some minds.

Shuanghui had to recall pork two years ago when it tested positive for banned substance clenbuterol, which is used to produce leaner meat.

Read More:

  • Needing Pork, China Is to Buy a U.S. Supplier (New York Times)
  • China’s appetite for pork spurs $4.7 billion Smithfield deal (Reuters)
Liz Leslie

Liz Leslie is a journalist based in Bloomington, Indiana. When she's not writing about food, she's likely eating food. Or dreaming about food.

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