Governor reacts to Smithfield Foods sale to Chinese firm

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by 13 News

WVEC.com

Posted on May 30, 2013 at 7:58 PM

Updated Friday, May 31 at 5:57 AM

NORFOLK-- Governor Bob McDonnell reacted for the first time to the news that a Chinese company may purchase Smithfield Foods.

McDonnell told WVEC.com that he thinks it's a positive development for the company and the state's economy. 

"I think that  it means not just a bump in the stock prices," he said,  "but it means the opening up of Asian markets for Smithfield in a whole new way.....this hopefully means a lot more business which hopefully means more jobs in Virginia and in North Carolina" 

McDonnell did have some concerns. " What does it mean for pork prices,  pork producers down the road.  I think we'll get more information as we go forward but the (Smithfield Foods) board obviously felt it was in the best interest for the company to do this,  to open new markets in Asia."

McDonnell said consumers should not be concerned about a change in the quality of Smithfield products.

"Oh no," he said, "because I think the whole idea is going to be American exports to China and India and other places because people in Asia really value the brand of American meats and dairy products because they know the FDA stamp of approval is a very good one."

He added, "I'd be very concerned if we were going to have hogs raised in China or India coming here,that's a different story. But I don't have any indication that's going to happen. It's the other way.... it's going to open up export markets abroad."

Chinese meat processor Shuanghui International Holdings Ltd. has agreed to take Smithfield Foods private for approximately $4.72 billion.

Shareholders of Smithfield, the world's biggest pork producer, will receive $34 per share. This is a 31 percent premium to the Smithfield company's closing stock price of $25.97 on Tuesday.

The companies put the deal's total value at about $7.1 billion, including debt.

 

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