When US senators raised a red flag about SoftBank’s proposed $20.1bn takeover of a majority stake in Sprint Nextel, they focused on the way the Japanese mobile operator’s network relied on a supply chain sourced out of China.
Political reaction in Washington to Shuanghui International’s bid for Smithfield Foods, however, has been muted by comparison, largely because the supply chain on this occasion runs in the opposite direction. Shuanghui plans to use the Virginia company to export pork to China from the US, and to learn how to run a global meat processor without the kinds of food safety problems that have damaged the reputations of Chinese producers.
Dan Rosen, who heads the China practice at the Rhodium Group, a consultancy in New York, said Shuanghui was buying Smithfield Foods not to enter the US market but to differentiate itself from its competitors at home.