"The outstretched arms of Obama" will leave the U.S. without pork

China Shuanghui International Holdings plans to buy the world's largest pig-breeding company Smithfield Foods Inc for $ 4.7 billion.

Agency reported Reuters. The agreed purchase price exceeds the market price by 31% Smithfield at the time of the transaction. The negotiations lasted for four years before the parties could not come to an agreement. The total amount of purchase from the Company debt will be approximately $ 7.1 billion

Financing of the transaction, which will be completed in the second half of 2013, will be made at the expense of the company's cash Shuanghui, rollover Smithfield, as well as debt financing. However, the acquisition of Smithfield Foods has caused concern among American politicians. The Committee on Foreign Investment is interested in buying. This framework assesses the level of risk to the national security of the country and the reconciliation process will take about 75 days.

One of the congressmen noted that the Chinese company has previously appeared in a scandal with the sale of low-quality meat.

«I strongly doubt that this purchase will have a positive impact on American consumers and urge federal regulators to think about it," - said the representative of the Democratic Party Rose Delara. However, The Wall Street Journal vysskazat in that spirit that the deal "is unlikely to face strong opposition" from regulators. "The administration of (U.S. President, ed) obviously holds public policy open arms, so I do not think there will be many" speed bumps "in the deal," - said a member of the US-China commission for economy and safety Michael Wessel.

basis of production of pork in China are small farmers, unable to expand production and increase the amount of slaughter weight because of the high financial cost of feed and a lingering threat of the spread of epizootic. Large-scale enterprises to expand production is not enough land, since 2008, China has been a net importer of pork. However, China's domestic market for foreign pork is hard to reach and high technical barriers, as can be seen from the history of the American giant, and create conditions for the expansion of the Chinese capital. U.S. experts believe that the common people in the U.S. do not have to fear an influx of substandard pork from China, and vice versa - American meat gets a new market.

Deal says, first of all, the increased demand for pork in China amid rising incomes of the population. China becomes more and more dependent on foreign producers , although a total produces about half of pork in the world. The growth rate of pork production in China account for about 15% over the past five years. If the deal is completed, it will become the largest U.S. company by absorption by a Chinese company.

On materials europe.wsj.com and www.rbc.ua