The U.S. government will extend its review of the proposed sale of Smithfield Foods to Shuanghui International, which would be the largest Chinese takeover of a U.S. company, Smithfield said on Wednesday.
The Virginia-based company said the Committee on Foreign Investment in the United States (CFIUS), the interagency group charged with reviewing the national security implications of foreign acquisitions, notified all parties that it will take an additional 45 days to review the deal that was submitted to the panel on June 18.
Lawmakers, food safety groups and consumers have expressed concerns about what the sale of the world’s largest pork processor to a Chinese company might mean for food safety, but most experts expect the deal will be approved. Smithfield said both companies expect the transaction to close in the second half of 2013.
While being grilled by the Senate Agriculture Committee earlier this month, Smithfield CEO Larry Pope vowed that the sale would have no impact on the quality or safety of Smithfield’s products.
“It will be the same old Smithfield, only better,” Pope said. “There should be no noticeable impact in how we do business operationally in America…except we plan to do more of it.”
Sens. Debbie Stabenow (D-MI) and Thad Cochran (R-MI), chairwoman and ranking member of the Senate Agriculture Committee, have urged the CFIUS panel, which is led by the Treasury Department and includes most national security-focused agencies, to include the U.S. Department of Agriculture and the U.S. Food and Drug Administration
“We believe that our food supply is critical infrastructure that should be included in any reasonable person’s definition of national security,” read a letter signed Stabenow, Cochran, and 13 of their agriculture committee colleagues. “Any CFIUS review of this transaction should look beyond any direct impact on government agencies and operations to the broader issues of food security, food safety, and biosecurity.”
Shuangui was embroiled in a high profile food safety scandal in 2011 after a state-run media outlet found the company was selling pork tainted with clenbuterol, a lean- and growth- promoting drug that is widely banned because it is dangerous at low levels in meat products. Pope and others have suggested the company is seeking to improve its food safety reputation by acquiring the expertise and technology that Smithfield Foods has developed and also by using a trusted American brand name.
The CFIUS panel responded to the letter but did not comment on the request, noting its review process is confidential.
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