Smithfield Deal Examined by Senate Ag CommitteeThu, 11 Jul 2013 05:17:04 CDT
The Senate Agriculture Committee met Wednesday to examine the proposed purchase of Smithfield Foods by China’s Shuanghui (shawn-way) International. Committee Chair Debbie Stabenow stressed the importance of taking a long-term view of the proposed acquisition - saying the purchase would be precedent-setting as it would represent the largest purchase of a U.S. company by a Chinese firm ever. The Committee hearing looked at how the government review process of foreign acquisitions of U.S. companies addresses American food safety, protection of American technologies and intellectual property and the effects of increased foreign ownership of the U.S. food supply. Smithfield CEO Larry Pope and experts on U.S.-China trade relations, global business, food safety and foreign acquisitions testified before the Committee.
Pope was the major cheerleader for the deal. "It provides enormous benefits for our two companies, for American manufacturing and agriculture. It is a partnership that is all about growth, and improving the agricultural environment in both the US and China.
"The new combined company expects to meet the growing demand for pork in China by exporting high-quality pork products from the US. This means more production for US producers, more jobs in processing and more exports for the US economy.
"At the same time, we will continue to supply our same high quality, renowned products to US consumers, as well as other markets around the world. Shuanghui is absolutely committed to continuing the long-term growth of Smithfield and to continuing to work with American producers and suppliers who have played an integral role in our success for many years." Click here for his full statement before the Committee.
Stabenow believes economic security is part of our national security and should be considered when the government reviews foreign investment into the U.S. During the hearing - she said we need to evaluate how foreign purchases of our food supply will affect our economy broadly and whether there’s a level playing field when it comes to these kinds of business purchases. Stabenow said it seemed this sale could not happen if it were the other way around.
Last month - Stabenow and several members of the Ag Committee urged the Secretary of the Treasury to include USDA and the Food and Drug Administration in the review process of the transaction. A letter signed by the Treasury’s Assistant Secretary for Legislative Affairs did not directly address that request - but states that the Committee on Foreign Investment in the United States - by law - may review only mergers, acquisitions and takeovers that could result in foreign control of a U.S. business. The letter goes on to state that CFIUS reviews focus exclusively on national security concerns and confidentiality is critical to the effective functioning of the CFIUS process.
The full video of the Senate Ag Committee Hearing is available on their website- click here to jump to that location.
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