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Breakingviews: Bringing home the bacon

Wednesday, May 29, 2013 - 03:36

May 29 - Rob Cox and Robert Cyran discuss Shuanghui’s $4.7 bln deal to buy Smithfield and the Chinese company’s strategy to export good pork out of the U.S.

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The biggest deal in port security history. Smithfield is being sold the strong way out of China the seven billion dollar priced deal. This is all about securing a life line to good pork in the United States for Chinese consumers present or zip or is it about something else -- it is that -- -- -- you know Chinese food it's just. Horrible you know like Chinese food or Italian food is good and you know -- many quality quality you know whether it's fluorescent pork report released -- fork wasn't there -- and others -- -- -- there's also ironically -- pork -- -- -- -- -- -- security is exactly. It's not the cheapest because what they're doing is strongly is going they're gonna pay I billions -- it with some debt -- force -- Use pork producer the largest US -- exactly what they're gonna do is they're going to not only imports from the technology in other words you know how they're gonna look let's -- this congress a bit like when. Wanda bought and see the big yet even if there was no obvious and he except for the part. The idea that they can and -- import that technology know how into growing Asian market more than -- to -- because. Also US hog producers prices are cheaper actually because it is colossus that aren't about to land exactly and he can bring those hogs. Them in China and the consultant and he supreme has got to bring in money and you know ex pats another error on channel one more -- things work well OK and -- one of the things that that I notice that partially Smithfield said. It will be business as usual only better at Smithfield. So you know usually when you see a company buys another company where management talks that way. It's you know we're got to Iowa home of the fired I think how does that work that we're gonna pay -- -- 31% premium. When they -- -- -- -- -- -- -- -- -- -- keep your headquarters opened all that effort the year except that it I mean. I guess in China this will play well right because they government owned company that in my I mean it's -- -- -- assume there's some government until it plays well in the same way that oil security plays or I'm -- you know or any of these guys and you buy these assets overseas. You -- you're actually. Able to import the actual hole in the ground -- you can say you've got oil and energy security and exposed in the sense food security is really important issue yet it is they actually have a -- stop or I'll -- -- strategic. Fourth reserve edited that the very large -- -- prices that's conscious of that upper Echelon Chinese Communist Party leaders -- always have the airport and went through exactly. Anything yet it's a big thing for -- also it helps for trade because I think about it you know to his company's thirteen meaning a lot of cash. -- and you know what they do with this cat is an art treasures and they could get it by treasury like 1% -- -- and then worry about it but even here. Last question Napoleon. Once said that an army marches on its comic and the French remember if you go to a deal to -- -- my younger -- -- done Denon. And of course I believe we've had one -- -- Examples are Chinese companies. That no way to American or other western companies buying consumer products companies in China. Why would the US levels -- go through if that was the case. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

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Breakingviews: Bringing home the bacon

Wednesday, May 29, 2013 - 03:36