Earlier today China’s Shuanghui International agreed to purchase the world’s largest pork producer, Smithfield Foods, for $4.7 billion and take the publicly traded company private.  Smithfield Foods is a Virginia based company that has a strong history and presence in North Carolina – the impact on this deal for North Carolina pork is not known at this time.

North Carolina Impact
In 1992, Smithfield Foods opened the world’s largest meat processing plant in Bladen County, and by 1998 North Carolina’s hog population had grown from 2 million to 10 million hogs.  In 2007, Duplin County was the largest county in North Carolina for hog and pig sales amounting to 4% of total U.S. value.

So what does this buyout mean for North Carolina?  While the impact is expected to be minimal at the onset, there is no guarantee since this business deal is still in the early stages.  This deal is subject to review by the U.S. Committee on Foreign Investment, and Shuanghui will pay the promised $34 per share to current Smithfield stockholders before any big changes can take place.  The 10,000 North Carolinian’s employed by Smithfield  Foods don’t need to look for new jobs yet, as Shuanghui has announced it does not want to change the operations, staff or management currently in place.

The driving force for the deal is the increased need to send U.S. pork to China.  This is easy to believe since China has had a handful of pork and meat health concerns over the last year.  Will the Chinese management of existing Smithfield production eventually loose their commitment to food safety?  No one is sure of the full impact this deal will have on United States exports or the Smithfield meat processing plant in North Carolina.