BEIJING (AP) — The force behind China’s biggest takeover of an American company is a 71-year-old meat-packing entrepreneur dubbed “China’s Chief Butcher†by the press who built an empire on his country’s voracious appetite for pork.
The $4.7 billion bid for Smithfield Foods by Wan Long, chairman of Shuanghui International, is another big step up for Chinese entrepreneurs who are emerging from the shadow of state-owned corporate giants and expanding on the global stage.
Under pressure to keep economic growth strong, the new government of President Xi Jinping has promised a bigger role and lighter regulatory burden to entrepreneurs who generate China’s jobs and wealth. Still, it is unclear how far the ruling Communist Party is willing to go in making crucial changes including curbing the dominance of state industry.
“If these Chinese entrepreneurs who are highly capable are allowed to get on and do what they do best, we’re going to see a lot more deals like this,†said Charles Maynard, senior managing director of Business Development Asia, which advises companies on acquisitions. “Despite lots of hurdles, they are increasingly able to think globally and act globally.â€
Another private investor, Fosun International, bought a stake last year in Club Med and says it will team up with insurer AXA to acquire the rest of the French resort operator. Last year, a private firm set the current record for the biggest Chinese takeover of an American company when Wanda Group bought the AMC cinema chain for $2.6 billion.
China’s private companies follow a different path from Western buyers pursuing acquisitions.
Cash-rich but inexperienced, they shop for brands, technology and skills to speed their development. Unlike Western buyers, which might lay off employees, Chinese companies keep them and sometimes hire more. Sweden’s Volvo Cars expanded its workforce after it was acquired in 2010 by Chinese automaker Geely Holding Group.