Thu, Jul 04, 2013 - Page 15 News List

Vetoes put Smithfield-China deal in question

Reuters

Missouri Governor Jay Nixon vetoed two bills on Tuesday that would have cleared the way for foreign ownership of farmland and potentially eliminated obstacles to the planned US$4.7 billion purchase of Smithfield Foods Inc by a Chinese company.

Missouri and at least seven other US states — Iowa, Nebraska, Minnesota, North Dakota, Oklahoma, South Dakota and Wisconsin — have often-overlooked laws that prohibit foreign ownership of agricultural land.

Nixon vetoed state Senate Bill 9, which contained a provision that would have struck down the existing ban on foreign ownership of agricultural land in the state. The provision would have allowed non-US businesses to own up to a total of 1 percent of the state’s agricultural lands — or about 121,400 hectares of farmland, an area the size of New York City.

The provision had been inserted as an amendment to the larger omnibus agriculture bill after it had already been rejected by a legislative committee and was opposed by leading agricultural groups, Nixon’s office said in a statement.

“Not only was this provision inserted into the bill without a public hearing, it was done so after the provision was rejected by at least one legislative committee on agriculture, as well as publicly opposed by leading Missouri agricultural groups,” Nixon said.

The governor also vetoed Senate Bill 342, which would also have allowed foreign ownership of farmland.

The decades-old statutes are virtually untested and some foreign farmland owners work around them by shifting their property into majority-US owned subsidiaries.

The laws are potential complications to the proposed acquisition of Smithfield, the world’s largest pork processor, by Shuanghui International Holdings (雙匯國際), China’s leading pork producer. The deal, valued at US$7.1 billion including debt, would be the biggest takeover of a US company by a Chinese company.

“Smithfield Foods and Shuang-hui International identified this issue during their discussions and it presents no obstacles to closing the proposed combination,” Smithfield said in a statement.

“We intend to consult and work closely with appropriate state officials on this matter as needed after the closing,” Smithfield said.

Shuanghui refused to comment.

Missouri lawmakers have the option of undoing Nixon’s action when they meet in September for an annual veto override session, an assembly librarian said.

This story has been viewed 1420 times.
TOP top