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
@PSUAgLawCenter
September 9, 2013
No comments:
Post a Comment