US OKs Chinese Acquisition of Smithfield Affirming Open Investment Policy

Smithfield Foods (of Smithfield, Virginia) announced on September 6 that the U.S. government’s Committee on Foreign Investment in the U.S. (CFIUS) has approved Smithfield’s acquisition by Shuanghui Holdings, a large Chinese/Hong Kong food company.  CFIUS, a nine-agency committee chaired by the Treasury Department, routinely reviews major acquisitions of U.S. firms by foreign firms for national security concerns.

USCIB welcomed the move. “CFIUS has never been a broad national screening mechanism for foreign direct investment into the U.S.,” noted Shaun Donnelly, USCIB’s vice president for investment and financial services.  “Nor in our view should CFIUS’s mandate be expanded beyond its present scope. We commend the Obama administration, and the CFIUS agencies in particular, for conducting the Smithfield/Shuanghui review rigorously and in compliance with long-established procedures and criteria laid out in relevant U.S. legislation and regulation.”

After the acquisition was first announced, there were calls from some in Congress and the media to expand the CFIUS mandate beyond clear national security criteria. “Had we succumbed to these siren calls to turn CFIUS into some sort of protectionist tool to deflect foreign acquisitions, especially from China or other ‘controversial’ partners, it could have jeopardized America’s traditional welcome mat for FDI,” Donnelly said. “The U.S. needs to be, and to be seen to be, a strong and consistent voice for open and transparent investment policies and regulations at home and abroad. Both inward and outward FDI are good for the U.S. economy, competitiveness and jobs. “

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

Staff Contact:   Shaun Donnelly

VP, Investment and Financial Services
Tel: 202.682.1221

Shaun Donnelly oversees USCIB’s work on foreign investment policy, treatment of multinational enterprises, financial services and anti-corruption. A career diplomat who has held several senior executive branch posts and joined USCIB in 2011, Donnelly leads business efforts to open markets abroad for American investment and financial services, and to promote high standards of protection for cross-border investment, both in the United States and overseas.
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