Sale of Smithfield Foods to Chinese Company is Troubling on Many Levels
On September 24th, Smithfield stockholders will vote on selling the largest hog producer and meat processing Corporation in the world to Shuanghui International Holdings of China.
According to news reports, if approved, it will be the largest take over of a U.S. corporation by a Chinese company . The value of the deal is $4.7 billion, at $34 a share.
Smithfield’s board of directors have approved the deal. CEO Larry Pope has testified in Washington, D. C., in favor of the sale. Federal Anti-trust reviews and an investigation by the U.S. Committee on Foreign Investment are underway.
If all involved approve, the deal could be done by the end of this year.
CEO Pope says this transaction is good for hog producers in America, because it further opens markets in Asian countries. According to Pope, language in the deal protects American jobs and will not compromise U.S. food safety.
I want to believe him because I think he believes what he is saying. However, I have my doubts.
China looks at deals with a much longer view in mind than short-sighted, eager to make money now stockholders. Bureaucrats, involved in the investigative process, won’t lose their jobs no matter what happens.
In my mind anti trust laws have been ignored for years. Remember the ‘too big to fail’ language of just a few years ago? Our federal government allowed some American companies to get too big. My trust in them to protect us from economic harm is very low.
It is true China needs to bring in food to feed their people. It is true China needs to learn from companies and countries the intricacies of creating commerce which is profitable and beneficial to its people.
The possible sale of one of our largest food purveyors to a foreign company is serious business.
I am nervous. I am not even to the “trust, but verify” stage voiced by former President Reagan.
We complain in this country about jobs going overseas, about foreign investment having more control of our economy. It is bad and sad, so many jobs have gone overseas.
Now we are thinking about allowing the ownership of this major food supplier and owner of hogs to be transferred to foreign investors. Is that in ‘our best interest?’
The government in China is not yet business friendly. They don’t rank very high on human rights scales either.
Could Chinese communist political leaders decide to take over Shuanghui International Holdings? If the answer is yes, what does that mean for the employees, farms, processing plants, and communities here?
I am not a stockholder in Smithfield. I don’t pretend to understand all the intricacies of international trade, commerce, and economics.
With what I know and don’t know, the potential impact on our economy, jobs, food supply, and communities, I would have to vote “no.”