(CBS News) Smithfield Foods, the world's largest pork producer, is being. The price: almost $5 billion. If approved, it will be the largest takeover of an American company by a Chinese buyer.
This is the latest in a string of American companies being purchased by China.
So why this company -- and why now?
They need the food, according to CBS News contributor and analyst Mellody Hobson. "That's the bottom line," she said. "China is the biggest consumer of pork in the world."
Food safety issues in China, as well, are another reason for the interest in Smithfield. She explained, "(Shuanghui will) get the safety of the United States and our methodology and our standards."
The Chinese government, Hobson added, is also "gently nudging corporate investors to move beyond just buying our debt, our treasuries, and buying hard assets in terms of companies here."
This is a good deal for Smithfield Foods, too, Hobson said. The world's biggest hog producer -- which raises 15.8 million a year at its 460 farms across the U.S. -- stands to make a good deal with the price 31 percent over the price at which the stock was currently trading.
U.S. senators, such as Chuck Grassley, R-Iowa, have raised concerns over whether this deal should go through based on competition concerns and origin of the pork products. "The Smithfield-Shuanghui deal ... highlights the need for country of origin labeling," Grassley said in a recent statement. "Like so many Americans, I would rather eat pork, beef and poultry raised in the United States. The deal only makes it more logical to ensure that American consumers know exactly what they are paying for and eating."
Addressing concerns about an American company being taken over by a Chinese brand, Hobson said it's not a big issue because they're not importing pork to the U.S. -- they're exporting it to China. She added, "That doesn't mean this will be a done deal because this still has to get through a very tough regulatory environment. And who knows what the regulators will say. The committee on investment in the U.S., they have to approve this deal and there's a chance they'll say 'No.' They've nixed a couple of deals recently."
In recent years, health inspectors detected the illegal food additive clenbuterol in pork products from a subsidiary of Shuanghui, "CBS This Morning" co-host Norah O'Donnell noted from a Wall Street Journal report. The company apologized on its web site and said it discontinued partnerships with producers using the contaminant.