Smithfield Foods, a major producer of pork that has 46,000 employees across the globe has recently cut a deal to be bought out by Shuanghui International Holdings Ltd.  This is the largest takeover of an American company by a Chinese firm which including debt is valued at $7.1 billion.  Pork producing companies such as Smithfield foods have seen costs rise due to increasing inputs (eg. the corn to feed the hogs).  With these rising costs they have been unable to increase the prices as the demand for pork has proven to be highly elastic.

With the takeover many hog farmers are worried that this will cause a decrease in their sales.  Smithfield would purchase hogs from the local farmers but now many people are worried they might only slaughter their own pigs now.  Despite this bit of backlash executives have been very insistent that this takeover was good for the overall industry and Smithfield itself.  The share-holder vote for whether to let the takeover continue got 96% of the votes.  CEO Larry Pope had this to say about the doubts “The times for this company and the future, I think are very bright,” Pope said. “It’s the same old Smithfield, but better.”

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Links:

http://www.kcautv.com/story/23398003/local-pork-producers-weigh-in-on-possible-smithfield-foods-buyout

http://www.therecord.com/news-story/4122340-smithfield-foods-shareholders-approve-pork-producer-s-sale-to-chinese-company/