Monday, September 9, 2013

CFIUS Issues Clearance for Smithfield Foods Merger with Shuanghui

On September 6, 2013, the Committee on Foreign Investment in the United States (CFIUS) granted approval of the purchase of Smithfield Foods by Shuanghui International. Smithfield expects the purchase, which is still conditional on Smithfield shareholder approval and customary closing conditions, to close shortly after the shareholder vote on September 24, 2013. Under the purchase, Smithfield shareholders will receive $34.00 per share in cash. According to Smithfield’s press release, Smithfield and Shuanghui are looking forward to moving ahead as one company. However, in a statement released by the Senate Agriculture, Nutrition, and Forestry Committee, Chairwoman Stabenow states that it is unknown what factors were used by CFIUS in making its decision to allow the merger, and that it is “troubling that taxpayers have received no assurances that… 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.”

CFIUS’s main purpose is to examine foreign mergers for potential threats to national security. Its reasoning for allowing or prohibiting a foreign purchase remains confidential.

Please see our previous blog post for more information. For an overview of the CFIUS investigation process generally, please visit its website.
Written by Sarah Doyle - Research Assistant
The Agricultural Law Resource and Reference Center
September 9, 2013

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