(Photo : Smithfield-Shineway)

The $4.7-billion takeover by China's Shineway International of Smithfield Foods Inc., the world's largest pork producer and processor, has been given a seal of approval by the Committee on Foreign Investment in the US (CFIUS).

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The approval means the US has allowed the Chinese company to purchase Smithfield in what would be the biggest acquisition by a Chinese company of an American firm.

The CFIUS approval was given on Saturday amidst claim by critics that the acquisition by Shineway, a private meat processing company and the largest meat producer in China, poses national security and threatens the food security of the United States.

No National Security Threats

The CFIUS, which is a unit of the US Treasury, is staked to investigate and review major foreign acquisitions of a US company for possible national security threats.

Shineway International CEO Zhijun Yang said that with the approval by the CFIUS, the deal will now go on to create a leading global animal protein enterprise. The statement was supported by officials of Smithfield.

It was a thrilling decision by the CFIUS because the same committee had blocked at least three Chinese companies' attempt to gain US assets in the past four years. The Smithfielf-Shineway deal was also criticized because of the national security threats that are allegedly attached to it. Experts, however, said the deal does not pose any threat to national security.

Shareholder Approval Still Needed

While it is already approved by US regulators, the deal will still have to be approved by Smithfield shareholders, which will be meeting on September 24. However, both companies see no more impediments to the transaction, even as one investor, Starboard Value, pledged to block the deal after suggesting that Smithfield will be worth more if broken up and sold in various units.

Smithfield CEO and President C. Larry Pope expressed gratefulness to the committee for giving the deal a careful attention and for finally clearing the way for the acquisition.