SMITHFIELD, Va. (WAVY) - Smithfield Foods has entered into a merger agreement with a Chinese company but says there won't be any changes in United States operations.
According to a press release, board members from Smithfield Foods and Shuanghui International -- the majority shareholder in China's largest meat processing enterprise -- agreed to the merger in a unanimous decision.
Smithfield Foods is valued at $7.1 billion.
When Smithfield Foods workers arrived at the plant Wednesday morning, they hadn't heard a word about a merger.
"What's going to happen with the plant? Are they going to shut us down or what?" said Tulisha Smith, a current employee.
"Everything else is leaving the country. Why not the pork production?" asked another worker.
In a written statement today, Smithfield Foods president C. Larry Pope assured workers they wouldn't notice much change. The name of the company will be different, but their duties and wages will be the same.
"Change creates uncertainty and that's always a worry," said Constance Rhodes, the president of the local chamber of commerce.
Rhodes suspected an announcement after hearing rumblings earlier this week. She says the focus of the merger is on exporting pork to China, not exporting jobs.
"This is a fine example of manufacturing staying here in the United States," said Rhodes. "We have a stellar product to give to China. Instead of having everything made in China, we are giving China products."
Rhodes says the Chinese company will bring more business to local ports, and in the end, may need to hire more local workers to keep up with the demand.
The transition sounds like it will be smooth, but still workers worry what big business will mean for the little guy.
"I just hope, at the end of the day, I still have a job," said Smith.
Smithfield Foods' common stock will no longer be publicly traded. Shareholders will receive $34 cash per share.
The Smithfield Foods shareholders and the Committee on Foreign Investment both have to approve the deal before it is final. If they do, the changeover could take place by the end of this year.
There will be no closures of any facilities or locations. Smithfield Foods' headquarters will remain in Smithfield.
Congressman J. Randy Forbes released a statement Wednesday about the merger:
"As what would be the largest takeover of a U.S. company by a Chinese buyer, the potential purchase of Smithfield Foods by Chinese meat processor Shuanghui International Holdings warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely."
Pope will continue as president and CEO of Smithfield Foods. Management and work forces will also remain the same at Smithfield Foods' Independent Operating Companies.
The press release stated the Chinese company will work with American farmers, producers and suppliers:
"This is a great transaction for all Smithfield stakeholders, as well as for American farmers and U.S. agriculture," said C. Larry Pope, president and chief executive officer of Smithfield Foods. "We have established Smithfield as the world's leading and most trusted vertically integrated pork processor and hog producer, and are excited that Shuanghui recognizes our best-in-class operations, our outstanding food safety practices and our 46,000 hard-working and dedicated employees. It will be business as usual, only better, at Smithfield. We do not anticipate any changes in how we do business operationally in the United States and throughout the world. We will become part of an enterprise that shares our belief in global opportunities and our commitment to the highest standards of product safety and quality. With our shared expertise and leadership, we look forward to accelerating a global expansion strategy as part of Shuanghui."
"We are pleased to have reached this agreement with Smithfield, which represents a historic opportunity for both companies and their stakeholders," said Shuanghui International chairman Wan Long. "Shuanghui is a leading pork producer in China and a pioneer in the Chinese meat processing industry with over 30 years of history. Smithfield is a leader in our industry and together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the United States and around the world. The combination creates a company with an unmatched set of assets, products and geographic reach."
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