The US and China are about to sign a deal over meat import, as the Smithfield Foods China deal is on the process. This deal is likely to strengthen the ties between the two countries. However, experts and regulatory bodies have stated that food safety issues will not be a problem for the people. US-based pork producer, Smithfield, and Shuanghui International Holdings, one of the leading meat processors of China, are getting into this $4.7 billion deal, where the US-based company will supply pork to Shuanghui. Once the deal is completed, Smithfield shareholders will receive $34 a share. Being the largest pork processor in the world, Smithfield will be ensuring a continuous supply of meat to China. The company is already selling packaged products to reputed brands across the world, including Cook’s, Armour, Farmland and Smithfield. Focuses on flavouring products, logistics and food, particularly meat.
The US authorities have stated that no concerns regarding food safety are likely to affect the trade. In 2011, Shuanghui was selling substandard grades of food to the customers. The Chinese authorities need to keep an eye on the quality of pork imported from the US. Tom Sauermilch, a senior partner and attorney in the mergers practice at McDermott Will & Emery, hopes that the regulators will easily approve the deal. However, they should take care that it does not become politicized.
He further stated that food safety is not a security concern for the nation, given that the existing agencies in the US can monitor the quality of food. Once the merger is approved, it will lead to the takeover of other firms based in the US by China. The Smithfield Foods China is likely to boost foreign trade between the two nations. However, certain officials are unhappy with the acquisition of a large US-based company by a foreign country.