The acquisition of Smithfield Foods by Shaunghui Holdings International was approved by the federal Committee on Foreign Investment in the United States last week according to the company. That committee reviews international business deals to determine any effect on national security. This acquisition will be the largest takeover of a U.S. company by a Chinese firm. The company will not be publicly traded after the deal is done.
But one of Smithfield’s shareholders, Starboard Value LP, said it plans to vote against the deal at a meeting scheduled for September 24, 2013. Food safety is not the concern of Starboard; that entity wants to make sure that shareholders get the best deal possible. Starboard says it has other written offers for a higher price.
In July, a coalition of consumer and farmer organizations asked that committee to reject the proposal because of concerns about food security, consumer food prices, food safety, and farm economies. Food & Water Watch stated in that letter that the Chinese food safety system is one of the most lax in the world. Smithfield is currently the largest of the four facilities that process more than 60% of all the hogs in the U.S.
