Legal Issues To Confront Smithfield-Shuanghui Deal in Midwest States

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The Smithfield-Shuanghui deal may face legal hurdles in states of Iowa, Missouri and at least three other states that have decades-old legislations regarding banning foreign ownership over agricultural lands. The US$4.7 billion deal between two companies will face scrutiny from a federal panel to assess the agreement for national security threats but does not reflect to block said acquisition

Iowa, Nebraska, Missouri, North Dakota, Minnesota, South Dakota and Wisconsin are among states that have legislation against foreign ownership over agricultural lands. If Shuanghui pushes through and falls under any of these states for related land use, the deal is said to invite legal challenges.

Smithfield does not specify its property holdings and refused to comment regarding the report. However, a source told Reuters that lawyers and dealmakers are aware of legal issues that may arise the moment the deal pushes through. They believe that said legislations will not jeopardize the deal between Smithfield and Shuanghui as planned to complete by the second half of this year.

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Shuanghui International, Smithfield Foods Inc.

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