RICHMOND, Va. (AP) - The ham sandwich you had for lunch is the latest example of China's growing appetite for U.S. investment.
Smithfield Foods Inc., one of the biggest pork producers in the U.S., on Wednesday agreed to be bought by Shuanghui International Holdings Ltd., the majority shareholder in China's largest meat processor, for about $4.72 billion.
The deal, which still faces a federal regulatory review and Smithfield shareholder approval, is the largest takeover of a U.S. company by a Chinese firm. It's the latest in a string of such deals made recently by Chinese companies.
But the acquisition is likely to face hefty U.S. scrutiny. It comes at a time when China has had serious food safety concerns, some of which have included the Hong Kong-based Shuanghui.
Risks to the U.S. food supply "enter everybody's mind," said Paul Mariani, director at Variant Capital Advisors in Chicago, who previously worked at a food and agribusiness boutique investment bank. But he said he believes Smithfield will continue to operate as normal.
Smithfield said the deal isn't about importing Chinese pork into the U.S. Instead, the company says it's a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.
Larry Pope, Smithfield's CEO, said in a conference call on Wednesday that the transaction "preserves the same old Smithfield, only with more opportunities and new markets and new frontiers."
"People have this belief ... that everything in America is made in China," he said. "Open your refrigerator door, look inside. Nothing in there is made in China because American agriculture is the most competitive and efficient in the world."
Indeed, the acquisition highlights what could be growing interest in American food by Chinese consumers. Foreign food, such as milk powder from New Zealand and vegetables from neighboring Asian countries, is prized by Chinese consumers because of the frequent domestic food safety scandals in their country.
Among the most notorious, six babies died and 300,000 were sickened in 2008 from drinking infant formula and other dairy tainted with the industrial chemical melamine. And Shuanghui's reputation was battered in 2011 when state broadcaster CCTV revealed its pork contained clenbuterol - a banned chemical that makes pork leaner but can be harmful to humans.
Derek Scissors, an expert on China's economy with the Heritage Foundation, a Washington-based conservative think tank, said companies like Shuanghui are "not looking to cause any trouble in the American market at all" or "cut corners."
"Quite the opposite ... They want to gain from what the U.S. is able to do," he said. "But whether they can operate an American company in the U.S. market remains to be determined."
The deal comes as Smithfield has been under pressure to improve its business.
Like most pork producers, Smithfield has been caught in a