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Foreign Acquisitions Unlikely to Stop With Hogs

Althea Chang
Big Data Download
Foreign Acquisitions Unlikely to Stop With Hogs

A Chinese firm's agreement to buy American pork producer Smithfield Foods is just one of many recent acquisitions of U.S. companies by overseas suitors, a trend that’s expected to ramp up in the coming years, an analyst says.

Chinese meat company Shuanghui said it plans to buy Smithfield (SFD) for $4.7 billion, or about $34 per share, making the purchase the biggest ever Chinese acquisition of an American company.

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Earlier this year, American eye care company Bausch & Lomb was acquired by Canadian firm Valeant Pharmaceuticals (VRX) for $8.7 billion and Eastman Kodak (EKDKQ) was purchased by U.K.-based KPP trustees. All three acquisitions, which are among the biggest this year, were announced just this month, noted S&P Capital IQ analyst Rich Peterson.

Cash-rich foreign companies see America as a safe haven whose companies represent major growth opportunities, Peterson said.

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Those purchases are likely to become more frequent, Peterson said, especially in the energy, health care and consumer staples sectors.

Judging from cash on their balance sheets, Peterson identified Royal Dutch Shell (RDS-A), Norway’s Statoil (STO) and Roche Holding (ROG-VX) of Switzerland as possible buyers of U.S. companies. Electronics company Samsung (SSNLF) of South Korea and Dutch-owned Anheuser Busch InBev (BUD) are also on Peterson's radar as possibly seeing acquisitions in the near future.

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