America has a bacon obsession. On average American individuals eat 18 lbs of bacon a year. And while our love for the cured meat isn’t exactly news, you might be surprised to find that Smithfield, Foods Inc., one of America’s biggest pork producers, might soon start selling its meat to a foreign buyer.
Shuanghui International, China’s largest meat processor, is hoping U.S. regulators will approve the company’s bid to take over Smithfield Foods, and is willing to fork over a healthy $4.7 billion to make it happen, reports NPR. This is a Chinese firm’s biggest proposal to take over an American company, and it comes at a time when the populous nation is experiencing an increased demand for meat and other processed-foods.
Questions that are still being mulled over include what the long-term impact on the pork industry would be if the acquisition happens.
“If the Chinese come to own Smithfield, will Smithfield be at the dictates of its Chinese owner? Or will they let market forces determine whether they are going to expand their herd size or not?” asked Dan Norcini, an independent commodities trader. “That’s the big question because it could impact the rest of the industry.”
Another concern looks to the past to determine if this deal should be passed. In 2011 Shuanghui found itself in some hot water after it was revealed that the company was feeding dangerous additives to pigs set for slaughter and consumption.
Even if the deal doesn’t go through, Smithfield might still end up selling to other foreign companies. It is reported that another Asian and a Brazilian company might be interested and were preparing bids at the time the Shuanghui deal was initially announced.