CFIUS approves Shuanghui acquisition of Smithfield Foods

Approval from Smithfield's shareholders is still required. This is expected to come at a special meeting on September 24, a statement said, after which the transaction will formally close.

"This transaction will create a leading global animal protein enterprise," said Zhijun Yang, CEO of Shuanghui International. "Shuanghui International and Smithfield have a long and consistent track record of providing customers around the world with high-quality food, and we look forward to moving ahead together as one company."

The proposed deal, which values Smithfield at $7.1 billion including debt, was announced at the end of May. Bank of China and Morgan Stanley are said to be providing $7 billion financing for the deal. Upon completion, Smithfield will continue to operate under its existing brand names as a wholly owned subsidiary of Shuanghui International.

Shuanghui's bid, however, stirred concern about US food safety and the protection of indigenous technologies and intellectual property.

On July 10, the head of the Senate Agricultural Committee held a hearing on foreign ownership of US food manufacturers in response to the proposed takeover. Eleven US senators expressed concerns over the potential negative impacts of the proposed acquisition of the Smithfield.

The two companies later made a filing with the CFIUS, the agency that has the power to veto the deal, and welcomed the regulatory review.

According to Shuanghui's 2012 annual report, CDH Investments owns 33.7% of Shuanghui International, while Goldman Sachs, New Horizon and Temasek Holdings have 5.18%, 4.15% and 2.76%, respectively. Entities controlled by Shuanghui International own 73.16% of Shenzhen-listed Henan Shuanghui.

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• Topics
• Greater China
• Consumer
• M&A
• USA
• Consumer
• CDH Investments Management
• Goldman Sachs
• New Horizon Capital
• Temasek Holdings
• China