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US LAWMAKERS TO EXAMINE SMITHFIELD-SHUANGHUI DEAL
Thursday June 27, 2013 8:41 PM
By Charles Abbott
WASHINGTON - U.S. lawmakers will examine the proposed purchase of Smithfield Foods , the world's largest pork processor, by Shuanghui International of China at a hearing in July, Debbie Stabenow, the head of the Senate Agriculture Committee, said on Thursday.
Smithfield Chief Executive Larry Pope will be among those to testify at the July 10 hearing. Other witnesses have not been announced.
At $4.7 billion, the proposed Smithfield-Shuanghui deal would be the largest acquisition of a U.S. company by a Chinese company. Nearly two dozen senators have urged a careful review of the sale by federal regulators.
The hearing, "Smithfield and Beyond: Examining Foreign Purchases of American Food Companies" will look at how the government review of such takeovers account for food safety and protection of American technologies and intellectual property.
It also will look at the effects of increased foreign ownership of U.S. foodmakers.
Led by Stabenow, 15 of the 20 senators on the Agriculture Committee and the leaders of the Senate Finance Committee wrote last week to Treasury Secretary Jack Lew to say food security must be a factor when regulators decide whether to approve the sale. The Treasury Department heads an interagency panel that reviews foreign investment for national security threats.
The letter from the Agriculture Committee on June 20 said the Agriculture Department and the Food and Drug Administration should be given roles in the review so that it includes experts in food supply and food safety.
China's Commerce Ministry said on Tuesday the Smithfield transaction was unrelated to food safety issues.
"We hope the U.S. will treat the merger case fairly and properly," it said in a statement that was its first response to questions raised by the lawmakers.
Smithfield and Shuanghui have filed the proposed deal with the Committee on Foreign Investment in the United States (CFIUS), the interagency panel headed by the Treasury. Many CFIUS experts believe the deal will be cleared.
"We welcome a full review and fair consideration of the Shuanghui-Smithfield combination from the U.S. government. We believe the proposed combination does not present any national security concerns, is good for US farmers and agriculture and will advance US-China relations," Smithfield said in a statement.
The company said it would "continue to provide Congress and CFIUS with all the information requested to allow a full and timely review of the combination."
The hearing will take place the same week that Chinese Vice Premier Wang Yang and State Councilor Yang Jiechi will be in Washington for high level talks with U.S. Treasury Secretary Jack Lew and Secretary of State John Kerry.
In midday trading Smithfield Foods was at $32.85, up 0.4 percent, on the New York Stock Exchange.
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