NEW YORK ( The Deal) -- Shuanghui International Holdings is expected to receive clearance from national security regulators for its planned $7.1 billion acquisition of Smithfield Foods ( SFD). An announcement of the approval could come from the companies as early as Friday. The investigation of the deal by the Committee on Foreign Investment in the U.S. is scheduled to close Friday. China-based Shuanghui announced Tuesday that it had put in place $4 billion in debt financing for the acquisition, a clear indication that the company is confident that it will win CFIUS approval. Smithfield revealed on July 24 that CFIUS had extended its review of the deal from the initial informal 30-day review to a second-phase, 45-day investigation that would run through Sept. 6.
China has been bedeviled by instances of food and toothpaste tampering, including a 2007 scandal in which melamine-tainted pet food exported to North America killed thousands of pets. In March, thousands of dead pigs washed ashore in Shanghai. The concerns even extend to pharmaceuticals. In a July 24 letter to Smithfield CEO Larry Pope, House Energy and Commerce Committee Chairman Fred Upton, R-Mich., and other senior Republicans on the panel noted that Smithfield is a major producer of the basic ingredient for heparin, a blood-thinning drug administered to 12 million Americans annually following heart surgery and for dialysis treatment. The Food and Drug Administration has blamed the 2008 deaths of at least 81 people in the U.S. and 785 serious injuries on a heparin raw ingredient that was processed in China.