AP Business Writer
LUOHE, China (AP) -- At an age when most Chinese executives are long retired, the country's top hog butcher is taking on a daunting new job persuading Americans to allow him to complete China's biggest takeover of a U.S. company.
Shuanghui International's $4.7 billion bid for Smithfield Foods Ltd. has the endorsement of the American company's board. But facing anxiety over food safety scandals in China and complaints about Chinese cyber spying, 72-year-old chairman Wan Long has launched a charm offensive to reassure Americans they have nothing to fear and possibly much to gain from the tie-up.
"We want to be vigilant that Smithfield's brand doesn't change, its team doesn't change, its production sites don't change, it doesn't cut jobs," said Wan in an interview at Shuanghui's 15-story headquarters in this eastern Chinese city.
As for reassuring American consumers about quality, Smithfield "already has a very good food safety control system," Wan said. "With our support, they will do better in quality and safety controls."
Wan's strategy of talking to reporters and inviting them to visit Shuanghui's packing plants is an unusual approach in China, where companies are secretive and corporate bosses rarely speak in public.
As Chinese companies expand abroad, those habits have hurt some when the United States, Australia and other countries balked at acquisitions by unfamiliar buyers in oil, mining and technology industries. Shuanghui's approach appears to reflect an understanding that success requires not just money but winning over politicians and consumers.
"There are plenty of examples of Chinese companies that made the largest offer but were not ultimately accepted," said Kenneth Jarrett, an expert on government relations for consulting firm APCO Worldwide in Shanghai. "For any Chinese company looking at any investment in the United States, they want to be aware of the political dynamic."
Shuanghui's bid for Smithfield represents a big step up on the global stage for Chinese entrepreneurs who are emerging from the shadow of state-owned corporate giants. Foreign acquisitions often are aimed at obtaining brands and skills to help cash-rich but inexperienced Chinese buyers set themselves apart from rivals and speed their development.
In an effort to defuse American concern, Shuanghui took the unusual step for a food company of announcing in advance it would submit the proposed acquisition for a U.S. government security review.
The Chinese acquisition of the biggest U.S. pork processor "is a bit concerning," said U.S. Sen. Chuck Grassley in a statement last week. He said regulators should look closely at the deal.
Wan, dubbed "China's Chief Butcher" by his country's press, stressed that selling pork loin and sausage is very different from the oil and high-tech companies that have run afoul of U.S. security objections.
"Ours is a food industry. It shouldn't be subject to controls," he said, sitting at a desk decorated with porcelain pig figurines. "I believe this will go through without a hitch."
Most Chinese acquisitions in the United States are completed uneventfully, but the few that have failed and the disclosures required to obtain regulatory approval have made companies skittish.
The Chinese state press frequently invokes the memory of state-owned oil company CNOOC Ltd.'s failed attempt in 2005 to buy American oil and gas producer Unocal Corp. CNOOC offered more money than rival Chevron Corp. and promised to retain Unocal's workforce but withdrew after some American lawmakers objected the deal might jeopardize national security.
Business consultants said CNOOC, little known abroad until then, stumbled by launching a surprise bid for Unocal without spending time to explain itself to American legislators and the public.
Technology giant Huawei Ltd., a major producer of telecom equipment, has faced business setbacks abroad due to concern it might be a security risk and the lack of public information about who controls the company. It is trying to dispel its image of secrecy and its founder, Ren Zhengfei, talked to reporters for the first time last month in New Zealand.
Acting as a high-profile spokesman is a new role late in life for Shuanghui's Wan, who might be the oldest full-time corporate boss in China, where some executives retire as early as their 50s. Last month, the founder of e-commerce giant Alibaba Group, Jack Ma, stepped down as CEO at age 48, saying he was "a bit too old for the Internet."
Born in 1940, Wan exemplifies the first generation of entrepreneurs who scrambled to seize opportunities after then-supreme leader Deng Xiaoping launched market-style economic reforms in 1979.
A former soldier, he already was in his 40s when his coworkers elected him manager of a struggling slaughterhouse in 1985. He is credited with turning around the facility with such radical innovations for the time as operating three shifts around the clock, every day of the year.