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The Chinese Are Coming, And They Want America's Pork

Tyler Durden's picture




 

Moments ago, news broke that in a stunning M&A move, an American pork icon - Smithfield Foods, may be acquired as soon as today by China's Shuanghui, also known as Shineway, which is China's largest pork producer. The Chinese are coming, and they want America's pork. It unclear how soon after the deal gets clearance by the Committee on Foreign Investment (if it does at all) will the US be subject to that well-honored China excess pig "clearance" strategy: floating 'em down the river.

From WSJ:

Chinese meat producer Shuanghui Group is close to a deal to acquire Smithfield Foods Inc. for between $4.5 billion and $5 billion, according to people familiar with the matter.

 

The sale of the Smithfield, Va.-based pork and meat producer could be announced as soon as Wednesday morning, and comes on the heels of agitation from a large shareholder to split up the company.

 

The bid by Shuanghui, also known as Shineway, represents a roughly 30% premium over Tuesday's close of $25.97, the people said. But a deal could be subject to review by the Committee on Foreign Investment in the United States, they said.

 

Smithfield's board of directors is concerned about the deal passing muster with CFIUS review, said a person familiar with the matter. The deal is structured with a reverse breakup fee in the event that the deal falls apart due to regulatory issues, the person said.

 

Founded in 1936, Smithfield has a market capitalization of $3.6 billion as of Tuesday's close.

 

Shuanghui Group, based in Henan province in central China, is the holding company for Henan Shuanghui Investment & Development Co., 000895.SZ +1.47% which is publicly listed in the Chinese city of Shenzhen. Shuanghui is China's largest pork producer, according to the company, and it sells products under the English name Shineway.

 

A spokeswoman for Smithfield couldn't immediately be reached.

Confused why China wants pork? Simple: the meat is the primary food in the country, the biggest source of marginal food inflation, and is produced more in China than in the entire rest of the world.

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Wed, 05/29/2013 - 07:24 | 3606714 francis_sawyer
francis_sawyer's picture

All the pork is on Capitol Hill...

Wed, 05/29/2013 - 07:26 | 3606717 GetZeeGold
GetZeeGold's picture

 

 

Some of it was in Syria yesterday...not sure what the hell he is up too.

 

The explanation has yet to be provided....pretty sure it has something to do with running guns.

Wed, 05/29/2013 - 07:31 | 3606730 ITrustMyGut
ITrustMyGut's picture

ya.. can't make this tuff up... 9/11 al -cia-duh...*cough*

10 years later.... we welcome our al cia-duh overlords!!!

=(

Wed, 05/29/2013 - 07:52 | 3606771 King_of_simpletons
King_of_simpletons's picture

...And you guys thought that the Chinese won't get paid for their status as America's de-facto lender. The boss always collects.

Wed, 05/29/2013 - 08:06 | 3606812 Lost My Shorts
Lost My Shorts's picture

I wonder if the new Chinese owners will be required to abide by environmental laws.  Lord knows, the Republicans hate to burden business with rules and regulations.  So when the Chinese want to dump pig waste on Americans (and they wrote the requisite $5,000 checks), I assume it will be no problem.

Wed, 05/29/2013 - 09:05 | 3607018 BLOTTO
BLOTTO's picture

Pigs get fat,

sheeps get fleeced.

Wed, 05/29/2013 - 09:18 | 3607062 MajorWoody
MajorWoody's picture

Porkers get porked, I'm luvin' it.

How much do you figure they'll pay for a 350 pound gal from Texas?

Wed, 05/29/2013 - 09:49 | 3607157 Boris Alatovkrap
Boris Alatovkrap's picture

China man is, how you say, not so well endowment. Maybe is like small gal from Texas more better.

Wed, 05/29/2013 - 10:54 | 3607417 merizobeach
merizobeach's picture

"small gal from Texas"

Boris is never go to Texas before.

Wed, 05/29/2013 - 10:59 | 3607443 old naughty
old naughty's picture

Boris never ate a cow "whip" (eh penis) like most chinamen, for endowment ?

"Manufacturing" some of that 500m slaughters a year is good for the economy, no?

Wed, 05/29/2013 - 11:15 | 3607500 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is vomit in mouth. Must go now.

Wed, 05/29/2013 - 15:13 | 3608269 TorchFire
TorchFire's picture

All your porks are belong to us.

Wed, 05/29/2013 - 10:07 | 3607245 Real Estate Geek
Real Estate Geek's picture

I stopped reading at Republicans. Open your eyes and see that the Elephants and the Donkeys actually comprise one party: the Pig party. And you're not a member.

Wed, 05/29/2013 - 08:00 | 3606788 Boris Alatovkrap
Boris Alatovkrap's picture

Pay up or your river is fill with floating pig cadaver!

Wed, 05/29/2013 - 14:14 | 3608052 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

LOL, stupid Chinese, they don't even know that Monsanto owns the entire pig species:

http://www.naturalnews.com/011581_Monsanto_patent_law.html

 

Wed, 05/29/2013 - 07:55 | 3606779 new game
new game's picture

long sons of anarchy

short rule of law

let real justice prevail...

Wed, 05/29/2013 - 07:25 | 3606715 lolmao500
lolmao500's picture

Stealing American weapons designs ain't enough for them? Pork? Let them eat cake!

Wed, 05/29/2013 - 08:02 | 3606794 Boris Alatovkrap
Boris Alatovkrap's picture

Weapon of Mass Consumption

Wed, 05/29/2013 - 09:41 | 3607140 fockewulf190
fockewulf190's picture

The US based pork will be sold in China for a big premium over domestic sources of pork because it will be considered "safe".  The same thing is currently happening with western produced powdered baby formula.  The Chinese don´t trust their own food industries, and will pay out the nose for quality.  Of course, those with cash will get the good stuff, while the poor will continue getting copious amounts of river pig.

Wed, 05/29/2013 - 09:47 | 3607154 Boris Alatovkrap
Boris Alatovkrap's picture

America Bacon is awesomeness, but Canadia Bacon is number one. Boris is put on yeast leavened crust with cheese, tomato paste, and pineapple and family is very happy for dinner.

Wed, 05/29/2013 - 12:40 | 3607773 DosZap
DosZap's picture

The US based pork will be sold in China for a big premium over domestic sources of pork because it will be considered "safe". The same thing is currently happening with western produced powdered baby formula. The Chinese don´t trust their own food industries, and will pay out the nose for quality. Of course, those with cash will get the good stuff, while the poor will continue getting copious amounts of river pig.

 

Don't forget plastic rice.

Wed, 05/29/2013 - 15:14 | 3608278 TorchFire
TorchFire's picture

Lock up your cats America.

Wed, 05/29/2013 - 07:25 | 3606716 sleepyguy007
sleepyguy007's picture

american will go to war over bacon.  this is the last straw.

Wed, 05/29/2013 - 07:28 | 3606724 francis_sawyer
francis_sawyer's picture

Next 'Commander in Chief' will be called 'The Bacon-a-tor'...

Wed, 05/29/2013 - 07:31 | 3606731 sleepyguy007
sleepyguy007's picture

i gotta say the chinese are smart.  they are trading us cheap plastic knick knacks for food companies.

Wed, 05/29/2013 - 21:52 | 3609174 cynicalskeptic
cynicalskeptic's picture

A pound of bacon here is already over $7 - up from $4 and change a year ago......

Wed, 05/29/2013 - 07:29 | 3606725 ITrustMyGut
ITrustMyGut's picture

the translation of worthless fiat debt bombs into tangibles... continues...

Wed, 05/29/2013 - 07:30 | 3606728 Smegley Wanxalot
Smegley Wanxalot's picture

Weren't the Chinese just floating dead pork down their rivers? Now they want to float ours???

Wed, 05/29/2013 - 07:41 | 3606752 kralizec
kralizec's picture

Are chickens safe from them?!

Wed, 05/29/2013 - 07:31 | 3606733 laomei
laomei's picture

Remember when everyone was scared of Japan.  And Japan came in and pissed away all their money on pointless shit that made no sense, ended up being money pits and other investments made to try and create some level of "respect"?  Remember when Japan rolled over on the Plaza Accord and as if by magic their economy plunged into a depression that it's been in ever since to this very day?

 

Neither of those things will be happening with China.

Wed, 05/29/2013 - 07:51 | 3606770 Ghordius
Ghordius's picture

I do remember. +1

I do also remember how all the talk about Chinese money flowing into the American political process created a small, short scandal - and was never mentioned again, particularly because "reform" brought our American Cousins the twin beauties of "corporations are persons" and the Super-PACs, which give every dollar the same electoral chances as the other dollar

careful, though, China could have a very bumpy road ahead, and your political system is not... foolproof and crisisproof

Wed, 05/29/2013 - 08:17 | 3606851 AnAnonymous
AnAnonymous's picture

Who knows? For 'americans', the group is all and they are a lot of 'american' wannabees in China.

Just like the others, they will blow money on acceptance.

Muslims are doing this at the moment, blowing money on sports teams and infrastructure.

Speaking of building a future alternative to oil...

Wed, 05/29/2013 - 08:24 | 3606874 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Who knows? For 'americans', the group is all and they are a lot of 'american' wannabees in China.

Should be prosperous for your JKC* franchise. Those free river pigs you fished in Shanghai are pure of profits.

 

*Just Killed Cat, popularous Chinese citizenism fastfood chain much the dangdang.

Wed, 05/29/2013 - 08:19 | 3606855 Hulk
Hulk's picture

No Pork for you !!!

Wed, 05/29/2013 - 07:33 | 3606735 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Melanin bar b q'd ribs anyone?

This deal probably should go through, but my guess is that it gets blocked.

We don't want pigs spying on us!

Wed, 05/29/2013 - 07:34 | 3606737 LawsofPhysics
LawsofPhysics's picture

Pork for gold. Sounds good to me.

Wed, 05/29/2013 - 07:38 | 3606744 laomei
laomei's picture

No, you'll be getting some of that worthless paper back that you've been printing.  Enjoy :)

Wed, 05/29/2013 - 08:31 | 3606903 shovelhead
shovelhead's picture

Haha,

Just what I was thinking.

"You think we stupid taking paper? Now we eat your lunch."

Wed, 05/29/2013 - 09:29 | 3606960 LawsofPhysics
LawsofPhysics's picture

Then no pork for you!!!  Possession is now the law after all.  Must be some serious chinese trolls out this morning.  It is what it is.  If I have the pork, I decide what I want in exchange motherfucker.

Wed, 05/29/2013 - 07:37 | 3606740 GoldForCash
GoldForCash's picture

If China acquires lets buy from another company.....right

Wed, 05/29/2013 - 08:26 | 3606878 Bobbyrib
Bobbyrib's picture

They won't need your demand. All that pork will go back to China. They might produce it here, but it will be going back to China.

Wed, 05/29/2013 - 21:56 | 3609183 cynicalskeptic
cynicalskeptic's picture

Saves them the collateral costs of feed and water needed to raise those pigs - more water from irreplaceable Noprth American aquifers is being exported to China with those pigs while the US is left with all the ponds of pig manure

Wed, 05/29/2013 - 07:37 | 3606741 orangegeek
orangegeek's picture

"...It unclear how soon after the deal gets clearance by the Committee on Foreign Investment (if it does at all) will the US be subject to that well-honored China excess pig "clearance" strategy: floating 'em down the river...."

 

ROR!!!

Wed, 05/29/2013 - 07:38 | 3606743 sudzee
sudzee's picture

Chineese political donations paying off in pork.

Wed, 05/29/2013 - 07:38 | 3606745 horot
horot's picture

So I presume the market will go  *Oink-Oink*

Wed, 05/29/2013 - 07:40 | 3606749 lolmao500
lolmao500's picture

Hide your kids, hide your wives, hide your dogs, the pigs are coming!

Wed, 05/29/2013 - 09:20 | 3607069 MajorWoody
MajorWoody's picture

Hide your obese relatives with pink skin

Wed, 05/29/2013 - 07:39 | 3606747 lolmao500
lolmao500's picture

Syria has positioned Tishreen missiles aimed at Tel Aviv. Tishreen has a 200 km range and half ton warhead. IAF will take these out first.

NATO chief to meet Obama in White House on Friday (AP)

This will end totally well...

Wed, 05/29/2013 - 07:43 | 3606754 Volaille de Bresse
Volaille de Bresse's picture

The plan is : 

 

"Pork meat for the Chinese, Soylent Green for the American people"!

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