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US/China: Record move into US market includes $275M risk for Chinese butcher

By  |  May 30, 2013

In what could become the largest buyout of a US-based company by a Chinese firm, Shuanghui – China’s top butcher – could lose millions if its acquisition of US-based Smithfield Foods is unsuccessful. According to reports, the agreement comes with a $275 million reverse breakup fee should the acquisition fall through. According to reports, the fee is worth nearly 6 percent of the offer’s equity value. Contractual filings say the fee will only be valid if regulators block the deal, but not if challenged by the US Committee on Foreign Investment. While reports say the deal will be closely looked at – rumors have already been reported that concerns are growing over the effect the deal would have on food standards and safety – experts expect CFIUS to approve of the acquisition.

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