Smithfield downplays governor's concerns over Shuanghui acquisition

by Bryan Salvage
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KANSAS CITY, Mo. – On July 2, Missouri Governor Jay Nixon vetoed two bills that would have opened the door for foreign ownership of farmland and possibly eliminated roadblocks to the previously announced planned $4.7 billion purchase of Smithfield Foods Inc. by Shuanghui International Holdings, China's top pork producer, Reuters reported

Missouri and seven other states – Iowa, Nebraska, Minnesota, North Dakota, Oklahoma, South Dakota and Wisconsin -- have previously and oftentimes overlooked laws that deny foreign ownership of agricultural land, the report relayed..
State Senate Bill 9, which contained a provision that would have struck down the existing ban on foreign ownership of agricultural land in the state, was vetoed by Nixon. The provision would have allowed non-US businesses to own up to a total of 1 percent of the state's agricultural lands – or approximately 300,000 acres of farmland.

The provision had been inserted as an amendment to the larger omnibus agriculture bill after it had already been rejected by a legislative committee and was opposed by leading agricultural groups, Nixon's office said in a statement. "Not only was this provision inserted into the bill without a public hearing, it was done so after the provision was rejected by at least one legislative committee on agriculture, as well as publicly opposed by leading Missouri agricultural groups," Nixon said.

Nixon also vetoed Senate Bill 342, which also would have approved foreign ownership of farmland.
The decades-old statutes are virtually untested and some foreign farmland owners work around them by shifting their property into majority US-owned subsidiary.

Although Reuters claimed these laws could provide complications to the proposed acquisition of Smithfield, Keira Lombardo, vice president of investor relations and corporate communications, Smithfield Foods Inc. wrote in an email to “As we said previously, we welcome a full review and fair consideration of the Shuanghui-Smithfield combination from the US government. We believe the proposed combination does not present any national security concerns, is good for US farmers and agriculture and will advance US-China relations. We will continue to provide Congress and CFIUS with all the information requested to allow a full and timely review of the combination.”

Meanwhile, Senator Debbie Stabenow (Democrat-Michigan), chairwoman of the US Senate Committee on Agriculture, Nutrition and Forestry, plans to hold a hearing on Wednesday, July 10 at 2:30 p.m. ET in room 562 of the Dirksen Senate Office Building on this pending purchase. She said in a news release that the hearing, entitled “Smithfield and Beyond: Examining Foreign Purchases of American Food Companies,” will examine the Smithfield purchase, the largest acquisition of an American company by a Chinese company in history.

This hearing also intends to examine how the government review process of foreign acquisitions of US companies addresses American food safety, protection of American technologies and intellectual property, and the effects of increased foreign ownership of the US food supply.

Last week, Stabenow and a bipartisan group of members from the Senate Agriculture Committee urged Treasury Secretary Jacob Lew in a letter to include both the US Department of Agriculture and the Food and Drug Administration in the government review of the proposed purchase of Smithfield Foods so the oversight process includes experts on the American food supply and food safety. The letter also raised questions about potential, future foreign acquisitions of American food companies such as those that will be considered in the hearing.

On the witness list are C. Larry Pope, president and CEO, Smithfield Foods Inc.; Matthew Slaughter, associate dean for faculty, Signal Companies’ professor of management, faculty director of the Center for Global Business and Government, Tuck School of Business, Dartmouth College, Hanover, NH; Dr. Usha Haley, professor and director, Robbins Center for Global Business and Strategy, West Virginia Univ., Morgantown, WV.; and Daniel Slane, commissioner, US-China Economic and Security Review Commission, US Chamber of Commerce, Washington, DC.
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By JanWindsong 7/5/2013 12:58:40 PM
I am so sorry this company ran their company into the ground, went into deep debt and the only solution was to sell to a foreign investor whose intent is well known. I am an American and I will never again buy any food that is even hinted at being part of the processing run by this company. They should be ashamed of themselves. I hope the money the receive from this deal rots in their bank accounts and everything they buy with it reduces to dust. The only way America will stay strong is to stay American. You know it and anyone with half a brain knows it. This is nothing but a sell out. Thank you to the Governors and the well thought out ancestors who put into place laws prohibiting ownership of our agricultural land. At least they knew what these business people don't want to admit. You cannot put the control of our food in the hands of foreign antagonists. Stupid decision.