Washington, May 30 (IANS) The biggest pork firms in China and the US plan to join hands in a $4.7 billion deal, the largest takeover of a US company by a Chinese rival, media reports said.
China’s Shuanghui International, based in Hong Kong, has agreed to pay cash for the Virginia-based Smithfield Foods, which, including debt, has been valued at $7.1 billion, BBC reported.
However, BBC said rival bidders may emerge since Smithfield has another 30 days to hold talks with other interested parties.
Thailand’s Charoen Pokphand Foods said it was considering bidding for the US company.
The report said Shuanghui’s takeover bid is likely to be closely scrutinised by US regulators due to a series of food scandals, including the sale of tainted meat, in China.
In 2011, Chinese state broadcaster CCTV revealed that Shuanghui’s pork products contained the banned chemical clenbuterol, which makes the meat leaner.
Shaun Rein, founder of China Market Research, told BBC that the Hong Kong-based firm was making a “very good” purchase as their brand suffered reputational damage from the clenbuterol scandal.
The deal is expected to close in the second half of the year, after which Smithfield’s will also cease to be publicly traded.