Reasons for Acquisition
WH Group, one of China’s largest meat producers, purchased Smithfield Foods for $4.7 billion in 2013. This has been noted as the largest ever Chinese acquisition of an American company, to date. WH Group sought to secure a stable supply of high-quality pork for China’s growing middle class, gain access to Smithfield’s advanced food safety and production technologies, and expand its global reach. For Smithfield, the deal provided significant capital and access to the vast Chinese market. Given the intense scrutiny by U.S. authorities of Chinese-lead companies, this acquisition does come with some contention.