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Smithfield merger Senate committee approval greeted with skepticism

Sept. 7, 2013 at 2:16 PM   |   Comments

WASHINGTON, Sept. 7 (UPI) -- A U.S. Senate committee has approved a merger of meat processor Smithfield with a Chinese company but Sen. Debbie Stabenow, D-Mich., said questions remain.

The Senate Committee on Foreign Investment in the United States approved the $4.7 billion sale of Smithfield to Shuanghui International Friday, but Stabenow -- who chairs the Senate Committee on Agriculture -- said it was not clear "what factors the committee took into account in making its decision."

"We still do not know if the potential impact on American food security, the transfer of taxpayer-funded innovation to a foreign competitor, or China's protectionist trade barriers were considered," Stabenow said.

"It's troubling that taxpayers have received no assurances that these critical issues have been taken into account in transferring control of one of America's largest food producers to a Chinese competitor with a spotty record on food safety," Stabenow said in a statement.

The New York Times reported Saturday that Shuanghui International has been the focus of an investigation in China concerning the sale of pork processed with clenbuterol, an additive that is illegal in China, the United States and the European Union.

The merger comes up against another hurdle Sept. 24, when Smithfield shareholders are to vote on the proposal.

A major Smithfield stockholder, the hedge fund Starboard Value, said it would vote against the deal.

The fund, which owns 5.7 percent of Smithfield, said it had discussed the deal with other potential buyers, some of which were willing to pay more than $4.7 billion, the hedge fund said.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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