When the biggest name in Chinese pork is poised to buy the biggest name in American pork, it's tempting to speculate what the purchase will bring.
Shuanghui International hopes its $4.7 billion acquisition of Virginia-based Smithfield Foods will bring legitimacy. Shuanghui is China's leading pork producer, but recent scandals have tarnished the name.
In 2011, hundreds fell ill from Shuanghui pork tainted with a banned growth-enhancing chemical. The national pork industry took another earlier this year when more than 16,000 dead pigs were found floating in the Huangpo River and its tributaries.
China is the largest consumer of pork worldwide, and the Smithfield purchase not only promises more meat, but also helps win back some consumer confidence. Smithfield owns more pigs than the next eight largest hog producers combined; and thanks to two decades of strategic mergers, the company roster now includes brands such as Eckrich, Farmland, Armour, and other famous names in American pork.
Shareholders on both sides unanimously applaud the purchase, and say it will benefit everyone, promising factory farming upgrades for Chinese producers, and a booming market for U.S. farmers. "It will be business as usual?only better,' said Smithfield president and CEO, C. Larry Pope in a May 29 statement.